Raises the percentage from eighty percent (80%) to eighty-five percent (85%) regarding declaring a vehicle a total loss.

Rhode Island Bill Summary: Vehicle Total Loss Threshold

This bill would change the rule that insurance companies use to decide when a damaged vehicle should be declared a "total loss." Under current Rhode Island law, if the cost to repair a vehicle reaches 80% of the car's value, the insurance company can declare it totaled and pay out the car's value instead of covering repairs. This bill would raise that threshold to 85%, meaning repair costs would need to be even closer to the car's full value before an insurer could declare it a total loss.

The change would primarily affect Rhode Island drivers who file auto insurance claims after accidents or other damage. Under the new rule, insurance companies would need to pay for repairs in more situations where they currently might declare a vehicle totaled. For example, if a car is worth $10,000, an insurer currently could total it when repair costs hit $8,000 — under this bill, they would need to wait until repair costs reach $8,500 before doing so.

This affects both car owners and insurance companies in different ways. Vehicle owners might benefit by keeping their cars rather than being forced to accept a total loss payout, which can sometimes leave them in a difficult financial position if the payout doesn't fully cover replacing their vehicle. On the other hand, insurers would face higher repair costs in some cases. The bill has been introduced and referred to the Senate Judiciary Committee, where it will be reviewed before any further action is taken.