What is the right to appraisal (RTA)?
RTA allows you to request a third-party appraisal if you disagree with your insurer on repair costs.
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Insurance / Auto Insurance
Consumer Protection Vanishing From Car Insurance Policies
The right to appraisal (RTA), a key consumer protection, is disappearing from some car insurance policies, potentially leaving drivers in a bind when insurance companies and repair shops disagree on repair costs. This article explores the i...
Key Insights
- The right to appraisal (RTA) allows policyholders to request a third-party appraisal if their repair shop and insurance company disagree on repair costs.
- Some insurers are dropping the RTA clause from their policies and pushing back on legislation requiring them to keep it.
- Texas and Washington passed bills in May 2025 mandating appraisal clauses in auto insurance policies.
- Insurers argue that RTA clauses can raise operating costs and, in turn, the cost of coverage.
- Rhode Island, Alaska, and Massachusetts have laws mandating RTA clauses.
In-Depth Analysis
### Background The right to appraisal (RTA) has long been a standard part of car insurance policies, providing a mechanism for resolving disputes between insurance companies and repair shops. However, this protection is now at risk as some insurers remove the clause from their policies.
### How RTA Works If your insurance company and repair shop disagree on repair costs, you can invoke the RTA clause to request a third-party appraisal. This appraisal is conducted by a neutral party, ensuring an unbiased assessment of the necessary repairs.
#### Example Scenario Andrew Batenhorst, a body shop manager, notes that disagreements are common due to rising repair costs and complexity. RTA helps consumers avoid shouldering out-of-pocket expenses when insurers underpay.
### Insurer Concerns Insurers like the National Association of Mutual Insurance Companies (NAMIC) argue that RTA clauses could increase operating costs, potentially raising premiums for all policyholders. They also suggest that these clauses might slow down the repair process.
### State Legislation Several states have taken action to protect the right to appraisal: - **Texas and Washington:** Passed bills in May 2025 requiring insurance companies to include appraisal clauses in auto insurance policies. - **Rhode Island:** Revised its Unfair Claims Practices Act to establish a legal right to appraisal. - **Alaska and Massachusetts:** Already require insurance companies to include appraisal clauses. - **New Jersey:** Introduced a bill in May to mandate RTA clauses in all auto policies.
### Impact on Premiums While insurers claim RTA laws will drive up costs, evidence suggests otherwise. In Rhode Island, after implementing RTA, car insurance premiums rose by 20%, but the national average increased by 31% during the same period.
### Protecting Your Rights - **Review Your Policy:** Check for an appraisal clause and understand its terms. - **Shop Around:** If your policy lacks an RTA clause, consider switching insurers. - **Weigh Costs and Benefits:** Understand the costs associated with requesting an appraisal. - **Monitor Legislation:** Stay informed about auto repair legislation in your state.
### External Resources - Bankrate - A key consumer protection is vanishing from some car insurance policies?ref=yanuki.com
FAQ
Why are insurance companies removing RTA clauses?
Insurers argue that RTA clauses can increase operating costs and potentially raise premiums.
Which states have RTA laws?
Rhode Island, Alaska, and Massachusetts mandate RTA clauses. Texas and Washington recently passed similar bills.
Takeaways
- The right to appraisal is a valuable consumer protection that helps resolve disputes between insurers and repair shops.
- Some insurers are trying to remove RTA clauses from their policies, potentially leaving consumers with higher out-of-pocket expenses.
- Several states are taking action to protect the right to appraisal by mandating its inclusion in auto insurance policies.
- Consumers should review their policies, shop around for better coverage, and stay informed about relevant legislation to protect their rights.
Discussion
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Sources
Disclaimer
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