Rhode Island sends total loss threshold bills to governor

The Rhode Island legislature sends bills to the governor that would increase the total loss threshold to 85%. 

Currently, insurers can’t designate a vehicle a total loss in the state if the cost to rebuild or reconstruct it to its pre-accident condition is 80% of fair market value. The threshold was increased to 80% in 2025 after the passage of a previous bill. 

SB 3115 and HB 7866 were sent to Gov. Dan McKee’s office last week after passing the House and Senate. 

Sen. Hannal Gallo (D-District 27), sponsor of the Senate bill, said on the floor that consumers who’ve maintained their vehicles for years should have the ability to choose if they want to keep it. 

“This act would allow a consumer to choose whether their motor vehicle should be designated a total loss when the cost to rebuild their motor vehicle is less than 85% of the fair market value,” she said. “With the retail cost of new and used cars being prohibitive for many consumers, it is vital that they have a choice of whether to repair their car.”

Following the passage of the bills, the Rhode Island Governor’s Insurance Council issued an open letter urging McKee to veto the bills. It claims the bills would increase the cost of vehicle insurance for Rhode Island consumers. 

“Gov. McKee has consistently emphasized affordability as one of his central goals for Rhode Island families,” said Travis McDermott, Governor’s Insurance Council chairman, in a press release. “While inflation is soaring, these bills risk moving the state in the wrong direction by increasing vehicle repair costs, driving insurance claim expenses higher, and placing additional pressure on auto insurance premiums.”

The letter states that insurance companies would be forced to repair more heavily damaged vehicles, rather than declaring them a total loss, ultimately increasing the amount spent on repairs by nearly $1 million annually in the state, adding that these are conservative estimates.

It adds that the state already ranks among the most expensive states in the nation for automobile insurance and repair costs. 

“Vehicles with substantial damage could be repaired rather than replaced, often requiring longer and more complex repair processes,” said Jennifer Morrison, the council’s secretary, in the release. “As a result, consumers wait longer, pay more, and find themselves driving vehicles that may be less safe and at higher risk of malfunctioning in a future accident.”

Multiple insurance lobbyists registered that they were against the Senate bill during a committee hearing last month. 

Chris Stark, Rhode Island Insurance Federation executive director, said repair shops asked for an 85% threshold in legislation last year, adding that insurance lobbyists asked for 75%. 

Sen. Leonidas Raptakis (D-District 33), a member of the committee, compromised at 80%, Stark said. 

“The Raptakis compromise isn’t even a year old, and we’re already back here trying to undo it,” Stark said. “This legislation has real consequences. It’s not consumer-friendly because when we get to this point of 85% loss to your vehicle from an accident, are we really catching everything? Are we really catching everything that’s wrong with that vehicle and comfortable enough to put it back out on the road safely?” 

Stark said that the total loss threshold is one of the last cost constraints the industry has within Rhode Island’s insurance market. 

Jonathan Schreiber, American Property Casualty Insurance Association state government relations associate vice president, told the committee that Rhode Island is the most expensive state for auto insurance costs. He added this is because of an “outlier status” in regard to regulations. 

One in 17 states has a 75% threshold, Schreiber said. He said 1 in 5 states have an 80% threshold. 

Rhode Island would be the only state with an 85% threshold, he said. But added that Colorado and Texas have higher thresholds. 

“This bill would move Rhode Island even further into far outlier territory,” Schreiber said.

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Sen. Hannal Gallo (D-District 27) discusses SB 3115 on the Rhode Island Senate Floor on June 3, 2026. (Video screenshot)