Consumer Safeguard Cut From Some Car Insurance Policies

When insurance companies and repair shops can’t agree, it’s often the driver who loses. And as a key consumer protection quietly disappears from some auto policies, that problem could get even worse.

The right to appraisal, or RTA, has long been a standard part of car insurance policies. It’s a common clause that grants policyholders the right to request an appraisal by a neutral third party if their repair shop and insurance company disagree on what it will cost to repair their car after a collision.

Now, however, repair professionals say that some insurers are dropping the clause from their policies — and have even started to push back on legislation that requires them to keep it.

In May 2025, two states passed bills to halt this emerging trend. Both laws — Texas Senate Bill 458 and Washington Senate Bill 5721 — require insurance companies serving the state to include an appraisal clause in all auto insurance policies. Other states may follow. Until then, in many parts of the country, the fate of this consumer right remains in the hands of insurers.

How does the right to appraisal work?

If you have a car insurance policy that includes comprehensive and collision coverage — that is, coverage for physical damage to your vehicle — your policy probably includes a short clause known as the appraisal clause, or RTA. If your insurance company and the collision repair shop fixing your car disagree about how much it costs to fix your vehicle after a crash, you can invoke this clause to request a third-party appraisal to resolve the dispute.

The right to appraisal plays an important role in the repair process, says Andrew Batenhorst, a body shop manager in California who’s handled dozens of RTA claims. With the cost and complexity of vehicle repairs on the rise, insurers’ estimates for vehicle repairs increasingly fall short of the estimates drawn up by repair shops.

“Disagreements are going to happen,” he says. “But there should be mechanisms in the policy that allow for an independent party to be able to mediate these types of situations.”

In most cases, Batenhorst says, consumers who invoke their right to appraisal do so to avoid shouldering steep out-of-pocket expenses for repairs that insurance companies won’t cover. “More often than not,” he says, “when I have used right to appraisal successfully, the insurance company is then forced to pay fairly for how the car should be fixed. And it works.”

But, he adds, “The insurance industry is not always a big fan of that.”

Why don’t insurance companies want the right to appraisal?

The right to appraisal grants consumers a key means of resolving disagreements between their repair shop and their insurance company during a car insurance claim. But Batenhorst says that insurance companies are becoming more critical of the appraisal process. “Most people don’t know,” he says, “but most of the big companies are actively working on trying to remove the clause in the policy that affords the right to appraisal.”

That might sound scary. After all, as Batenhorst points out, it’s rarely the insurance company calling for a third opinion on how much repairs should cost — so consumers may have more to lose than insurance companies when appraisal clauses are removed from policies.

But there’s more behind insurers’ ambivalence towards RTA clauses than an attempt to wiggle out of paying higher claims. Brandon Vick, regional VP for the Pacific Northwest at the National Association of Mutual Insurance Companies (NAMIC), says that while appraisal clauses are still standard for most insurers, there’s a concern that expensive appraisals could raise operating costs — and, in turn, the cost of coverage.

Take Washington state, where Senate Bill 5721 just passed. The majority of insurers in the state already had these clauses, Vick says. But for those that didn’t, the law’s new requirement to add appraisal clauses could cause “some increase in rates.”

Vick isn’t the only member of the insurance industry voicing these concerns. Representatives of the Northwest Insurance Council and American Property Casualty Insurance Association (APCIA) testified before the Washington State Senate in opposition to SB 5721, arguing that requiring appraisal clauses in every auto policy would incentivize more drivers to invoke their right to appraisal, thus “slowing down the repair process and raising costs over time.”

Do right to appraisal bills raise the cost of car insurance?

Insurance lobbyists warn that enshrining the right to appraisal in state laws will drive up the cost of coverage — but how serious is that threat?

Let’s take a look at Rhode Island, one of the only states in the country with an existing right to appraisal law. Senate Bill 925 of 2023 revised the state’s Unfair Claims Practices Act and established a legal right to appraisal for all auto insurance policyholders in the state of Rhode Island, regardless of what their auto policy says.

In the two years since SB 925 took effect in Rhode Island, car insurance premiums have increased. However, that increase reflects much more than the change in the Unfair Claims Practices Act. Market forces like an increase in vehicle theft, rising healthcare costs and a nationwide auto technician shortage have all contributed to a 20 percent increase in the cost of car insurance in Rhode Island over the last two years.

But in the time that Rhode Island’s average auto insurance premiums increased by 20 percent, the average cost of insurance nationwide increased by 31 percent. In other words, Rhode Island drivers actually saw their car insurance premiums rise at a slower rate than the nation as a whole following passage of the 2023 right to appraisal law.

How recent RTA bills won support from the insurance industry

While insurance organizations have voiced opposition to the passage of right-to-appraisal laws like Washington’s SB 5721 and Texas’s SB 458, both bills underwent a significant change that made them more acceptable to insurers.

“The one big change that we were able to secure” in Washington SB 5721, Vick says, was the removal of the “insurer pays” provision. In the original bill introduced in February, if the appraiser’s final determination of the amount of loss was $500 greater than the insurer’s estimate, the entire cost of the appraisal, including appraisers’ and attorneys’ fees, would fall to the insurer to reimburse.

Texas’s RTA bill underwent similar edits. A previous version of SB 458, proposed but not passed in 2023, specified that if the cost of repairs was found to be higher than the insurance company’s initial estimate by even $1, the insurer would be required to pay for the policyholder’s appraisal, as well as their own. The version set to take effect this September includes no such stipulation.

Which states have right-to-appraisal laws?

Only a few U.S. states currently have laws mandating the right to appraisal either as part of statutory law or a required portion of all auto insurance policies.

In addition to Rhode Island, laws in Alaska and Massachusetts require insurance companies to include an appraisal clause in all personal auto insurance policies. In Virginia, there’s no statutory requirement that insurers include appraisal clauses, but the standard auto policy does include this clause, and insurers who limit appraisal only to total losses may be in violation of the Virginia Bureau of Insurance’s regulations.  

And Texas and Washington aren’t the only states to propose new right-to-appraisal legislation this year. In May, legislators in New Jersey introduced a bill that would require insurers to include the RTA clause in all auto policies. 

But in most parts of the U.S., the right to appraisal in the collision repair process is still something voluntarily granted — or revoked — by insurance companies. And while appraisal clauses remain standard for most insurers, the passage of new laws indicates that it’s becoming an expense that not all insurance companies are willing to shoulder.

How to protect your right to appraisal

• Review your policy: Don’t wait until you’re midway through a claim to read your auto policy’s fine print. Understanding the rights your policy grants you can help to streamline the claim process (and ensure that you’re carrying the right coverage in the first place).
• Consider shopping around: If you’re not happy with the provisions of your current auto insurance policy, you may want to shop around for a policy with a different insurer. In addition to getting quotes, take time to research how different carriers handle claims through user reviews and third-party ratings like the J.D. Power U.S. Auto Claims Satisfaction Study or the CRASH Network Insurer Report Card.
• Weigh the costs and benefits of an appraisal: If your policy does include an appraisal clause, be sure that you understand the costs associated with requesting an appraisal and compare them with the potential gain.
• Keep an eye on auto repair legislation in your state: As collision repair advocates push for stronger legal protection for the right to appraisal, more states may pass laws like Texas and Washington did.