SECTION 365:15-3-8. Standards for prompt, fair and equitable settlements applicable to automobile insurance

(a)   Automobile total losses. When the insurance policy provides for the adjustment and settlement of first party automobile total losses on the basis of actual cash value or replacement with another of like kind and quality, one of the following methods must apply:

(1)   The insurer may elect to offer a replacement motor vehicle which is a specific comparable motor vehicle available to the insured, with all applicable taxes, license fees and other fees incident to transfer of evidence of ownership of the motor vehicle paid, at no cost other than any deductible provided in the policy. The offer and any rejection thereof must be documented in the claim file.

(2)   When a first party motor vehicle total loss is settled on a basis which deviates from the methods described in (1) and (2) of this subsection, the deviation must be supported by documentation giving particulars of the automobile condition. Any deductions from such cost, including but not limited to, deduction for salvage, must be measurable, discernible, itemized and specified as to dollar amount and shall be appropriate in amount. The basis for such settlement shall be fully explained to the first party claimant.

(b)   Third party claimants. Where liability and damages are reasonably clear, insurers shall not recommend that third party claimants make claim under their own policies solely to avoid paying claims under such insurer's insurance policy or insurance contract.

(c)   Unreasonable travel. Insurers shall not require a claimant to travel unreasonably either to inspect a replacement motor vehicle, to obtain a repair estimate or to have the motor vehicle repaired at a specific repair shop.

(d)   Including deductible in subrogation demands. Insurers shall, upon the claimant's request, include the first party claimant's deductible, if any, in subrogation demands. Subrogation recoveries shall be shared on a proportionate basis with the first party claimant, unless the deductible amount has been otherwise recovered. No deduction for expenses can be made from the deductible recovery unless an outside attorney is retained to collect such recovery. The deduction may then be for only a pro rata share of the allocated loss adjustment expense.

(e)   Estimates. If an insurer prepares an estimate of the cost of motor vehicle repairs, such estimate shall be in an amount for which it may be reasonably expected the damage can be satisfactorily repaired. The insurer shall give a copy of the estimate to the claimant and may furnish to the claimant, the names of one or more conveniently located repair shops, if requested by the claimant.

(f)   Reductions due to betterment or depreciation. When the amount claimed is reduced because of betterment or depreciation, all information for such reduction shall be contained in the claim file. Such deductions shall be itemized and specified as to dollar amount and shall be appropriate for the amount of deductions

(g)   Repairs. When the insurer elects to repair a damaged motor vehicle and designates a specific repair shop for automobile repairs, the insurer shall cause the damaged motor vehicle to be restored to its condition prior to the loss at no additional cost and within a reasonable period of time. The claimant shall also be furnished an itemized statement of repair at the time of acceptance of the repaired motor vehicle.