Virginia governor signs estimate reduction bill into law
Virginia Gov. Abigail Spanberger has signed a bill into law, effective July 1, that prohibits an insurer from altering or amending an insurance adjuster’s damage estimate when the reduction exceeds $3,000.
It would also prohibit changes to photographic report data and the estimate’s narrative report without meeting certain requirements, including providing the policyholder with a detailed explanation for any change that reduces the loss estimate.
House Bill 808 amends Virginia’s unfair claim settlement practices law to require insurers to disclose to policyholders a detailed list of all changes made and the identity of the person who made or ordered them, and must retain all versions of the report.
The statute already prohibits settling claims based on an application that was altered without notice to, or knowledge or consent of, the insured, and making vehicle repair cost appraisals without a personal inspection by a representative of the repair facility or an insurer representative.
It is also an unfair claim settlement practice under Virginia law to prepare or use a vehicle repair cost estimate based on the use of an aftermarket part unless the insurer informs the claimant in writing.
In February, bill sponsor Rep. Dan Helmer (D-District 10) said the bill is a result of complaints he’s received from constituents. He gave a scenario of adjusters giving an estimate of $20,000 to repair a home after a disaster or $8,000 to replace a vehicle.
“And then you get a note from the insurance company that says, ‘Oh, actually, we are only going to cover $6,000 of the $20,000, or $4,000 of the $8,000, and there’s no explanation because it is not required,” Helmer said. “We are simply trying to address that. Other states from Florida to Maryland have taken cracks at this, so it is not a Red State or Blue State problem; it is an all-of-us problem. This bill requires a detailed explanation and a record of changes.”
Jordan Hendler, executive director of the Washington Metropolitan Auto Body Association (WMABA), also spoke in favor of the bill. She said this is an issue that the collision repair industry sees thousands of cases of daily.
Repairers, by helping consumers, witness the difficulties in reaching claim centers, which have transitioned from regional to centralized hubs, she said. Hendler added that vague settlement answers leave consumers with a “sue or submit” ultimatum.
She also wrote an official letter of support for the bill that outlines a systemic lack of transparency in the claims process, which allows companies to modify adjusters’ reports behind the scenes and often reduce the payout without the consumer knowing why.
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