New Jersey Bills Seek Mandatory Auto Insurance Appraisal Rights

New Jersey Assembly Bill 6106 aims to require all auto insurers in the state to include appraisal provisions in their policies. This legislation would provide consumers with a formal mechanism to dispute claim settlements that do not cover the actual repair costs, a measure reflecting similar efforts in Senate Bill 4534. Sponsored by Assembly members Dan Hutchison and Cody D. Miller, the bill mandates that either policyholders or insurers can demand an appraisal by a "competent and disinterested appraiser" when there is disagreement on the claim's value. The Alliance of Automotive Service Providers of New Jersey (AASP/NJ) supports this legislation, emphasizing its importance to consumers and the collision repair industry. They note a trend where insurers are removing appraisal clauses or discouraging their use, thus limiting consumers' ability to address contested claims effectively. The bills would also uniquely extend appraisal rights to third-party claimants who typically lack recourse when negotiating liability settlements with at-fault parties' insurers. Under the proposed law, once appraisal is requested, each party has 20 calendar days to appoint an appraiser, with both appraisers having 20 business days to determine the actual cash value and loss amount. In cases of disagreement, a mutually selected or court-appointed umpire delivers a binding decision. If passed, the law would take effect 90 days post-enactment, applying to claims initiated thereafter. This legislative initiative aligns New Jersey with other states like Texas, Washington, Rhode Island, Alaska, and Massachusetts, which have enacted similar mandatory appraisal laws. These laws aim to enhance consumer protection by ensuring appraisal rights are embedded in auto insurance policies. Industry advocates encourage collision repair shops to participate in the legislative process by communicating with local legislators to support the bill's progress. The effort underscores evolving regulatory focus on consumer rights in auto insurance claims and the critical role of appraisal provisions in dispute resolution. As insurers increasingly limit claim dispute options, statutory protections like these may set important precedents for broader industry practices and policyholder protections in the U.S. auto insurance market.