Rhode Island House Bill H7517

Rhode Island 2026 Regular Session

• Introduced: 2/6/26
• Refer: 2/6/26

Caption

Strengthens consumer protections in insurance claims by expanding definitions of unfair claims settlement practices and clarifies an insured’s right to pursue bad-faith remedies.

Impact

If passed, H7517 will amend existing statutes concerning causes of action against insurers, enabling insured individuals to file claims for compensatory and punitive damages when their insurers refuse to honor claims in bad faith. Key revisions include emphasizing the insurer’s obligation to conduct thorough and reasonable investigations of claims. This could significantly shift the landscape for insurers operating within the state, potentially leading to increased litigation and changes in insurance claim handling processes, which may drive reform in insurance practices towards greater transparency and fairness.

Summary

House Bill H7517 aims to strengthen consumer protections in the realm of insurance claims by expanding the definitions of unfair claims settlement practices. The bill enhances clarity regarding an insured’s right to pursue legal remedies in instances where insurers act in bad faith by refusing to pay or settle claims. This legislation introduces a more robust framework for accountability within the insurance industry, and it seeks to ensure insured parties are treated fairly and equitably by their insurance providers.

Contention

The bill has faced some contention concerning how broadly it defines 'unfair claims settlement practices'. Critics argue that expanding the definitions may lead to an influx of litigation against insurers for what could be seen as standard business practices. Proponents assert that the changes are necessary to hold insurers accountable and protect consumers from predatory practices. The potential for increased operational costs for insurers due to heightened scrutiny and litigation risk has also been a topic of discussion among lawmakers and industry stakeholders.