Amended Illinois right-to-appraisal bill passed by Senate
An amended version of Illinois’ right-to-appraisal legislation has been passed by the Senate.
The amended HB 4160, as passed by the Senate on Thursday 56-2-0, would require every auto insurance policy that includes first-party coverage for physical damage to include a provision granting the insured, without the company’s consent or agreement, and the insurer, the right to invoke appraisal if there is a dispute over the amount of a loss.
If passed, the bill would become effective July 1, 2027, and apply to every auto insurance policy issued, renewed, or delivered on or after that date.
The original bill required the appraisal provision for disputes over both amount of loss and actual cash value, including repairable or total loss amounts, or the value of a settlement offer made to a third-party claimant.
The amendment maintained the manner in which appraisal would be invoked, which is by written demand, as well as the timelines for doing so.
Within seven calendar days after receiving the demand, each party would select a competent and disinterested appraiser, and notify the opposing party in writing of the selection.
If the appraisers can’t agree on the amount of a loss or a settlement offer within five calendar days after the date of their appointment, they would jointly select an umpire. If the appraisers fail to agree on an umpire within 15 calendar days after they fail to agree on the amount of the loss, either party can petition a court to appoint a suitable umpire.
“The two appraisers or, if there is a disagreement under paragraph (3), one appraiser and the umpire shall issue an award determining the amount of the loss,” the bill states. “A final award shall be determined within 5 business days after the umpire was selected. An agreement by any two of the three, either both appraisers or one appraiser and the umpire, shall be binding upon all parties.”
Each party would pay for its appraiser, and if an umpire is necessary, the cost would be shared equally between the parties.
The Alliance of Automotive Service Providers of Illinois, the Alliance for Automotive Innovation, and more than one dozen collision repair and auto body shops are proponents of the bill. The American Property Casualty Insurance Association opposes the bill.
The bill no longer includes what would happen if insurers fail to comply with the appraisal provisions, nor does it require the Department of Insurance to create an Automotive Appraisal Standards Advisory Board as the original bill did. The purpose of the board would have been to guide rulemaking, enforcement priorities, and best practices within 120 days of the bill becoming law, according to the original bill.
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