Sponsored by:
Senator PAUL D. MORIARTY
District 4 (Atlantic, Camden and Gloucester)
SYNOPSIS
Requires automobile insurers to include appraisal provisions in insurance policies.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning right to appraisal provisions and supplementing Title 17 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Every automobile insurer authorized to write automobile insurance policies in this State shall ensure that each policy issued, executed, renewed, or delivered to a consumer contains a provision allowing for an appraisal by a competent and disinterested appraiser if the policyholder and insurer disagree on:
(1) the actual cash value or amount of a loss, including the repairable and total loss amount, of an automobile reported on a claim; or
(2) the offer of settlement to a third-party liability claim.
b. If the policyholder and insurer disagree as to the actual cash value or amount of a loss reported on a claim, after the automobile reported on the claim is inspected and given an estimate of the actual cash value or amount of a loss by an automobile body repair shop selected by the policyholder, or disagree on the offer of settlement to a third party:
(1) either the policyholder or insurer may submit a written demand letter to the other invoking the appraisal provision of a policy to select a competent and disinterested appraiser. The party receiving the written demand shall have 20 calendar days to notify the other of the appraiser they have selected. The selected appraisers shall then, within 20 business days, appraise the loss, stating separately the actual cash value and amount of loss, or the offer of settlement.
(2) If the selected appraisers fail to agree on the actual cash value and amount of loss, or on an appropriate offer of settlement, documentation memorializing the differences, including the actual cash value and amount of loss as calculated by each appraiser, shall be submitted to a competent and disinterested umpire selected by the appraisers or, on request of either of the parties, by a judge in a court of competent jurisdiction, if the appraisers fail after 15 calendar days to agree upon the selection of an umpire. After reviewing the submitted documentation, including each appraisers’ statement of the actual cash value and amount of loss, the umpire, or judge, if applicable, shall issue an award to one of the appraisers selected by the parties, which shall be filed with the insurer.
c. The provisions of this section shall additionally apply to a third-party claimant, if the claimant and the insurer disagree on the actual cash value or amount of a loss reported on a claim used to determine the valuation of an offer of settlement.
d. As used in this section:
“Competent and disinterested appraiser” means an appraiser that is impartial and without a financial interest in the opposing party when conducting an appraisal on behalf of an insurer, policyholder, or third-party claimaint.
“Offer of settlement” means a formal offer to settle a third party liability claim filed by an individual other than the policyholder or insurer.
“Third-party liability claim” means a liability claim filed by an individual other than the policyholder or insurer.
2. This act shall take effect on the 90th day next following enactment and shall apply to claims filed and offers of settlement made on or after that date.
STATEMENT
This bill requires automobile insurers to include an appraisal provision in insurance policies.
Under the bill, every automobile insurer authorized to write automobile insurance policies in the State must ensure that each policy issued, executed, renewed, or delivered to a consumer contain a provision allowing for an appraisal of the value of a loss reported in a claim if the policyholder or insurer disagree on:
(1) the actual cash value or amount of a loss, including the repairable and total loss amount, of an automobile reported on a claim; or
(2) the offer of settlement to a third-party liability claim.
The bill provides that if the policyholder and insurer disagree as to the actual cash value or amount of a loss reported on a claim, after the automobile reported on the claim is inspected and given an estimate of the actual cash value or amount of a loss by an automobile body repair shop selected by the policyholder, or disagree on the offer of settlement to a third party, either the policyholder or insurer may submit a written demand letter to the other invoking the appraisal provision of a policy and selecting a competent and disinterested appraiser. The party receiving the written demand will have 20 calendar days to notify the other of the appraiser they have selected. The selected appraisers will then, within 20 business days, appraise the loss, stating separately the actual cash value and amount of loss, or the offer of settlement. If the selected appraisers fail to agree on the actual cash value and amount of loss, or on an appropriate offer of settlement, they must then submit any differences to a competent and disinterested umpire selected by the appraisers or, on request of either of the parties, by a judge in a court of competent jurisdiction, if the appraisers fail after 15 calendar days to agree upon the selection of an umpire. After reviewing each appraisers’ statement of the actual cash value and amount of loss, or offer of settlement, the umpire, or judge, if applicable, will finally issue an award to one of the appraisers selected by the parties, which will be filed with the insurer.
The bill further provides that the appraisal clause will additionally apply to a third-party claimant, if the claimant and insurer disagree on the actual cash value or amount of a loss reported on a claim that is used to determine the valuation of an offer of settlement.
For the purpose of this bill, “competent and disinterested appraiser” means an appraiser that is impartial and without a financial interest in the opposing party when conducting an appraisal on behalf of an insurer, policyholder, or third-party claimant. “Offer of settlement” means a formal offer to settle a third party liability claim filed by an individual other than the policyholder or insurer. “Third-party liability claim” means a liability claim filed by an individual other than the policyholder or insurer.