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Law Update

New Regulations Affecting Property/Casualty Claims Handling Adopted

            The New Hampshire Insurance Department has adopted new regulations affecting insurance claims practices handling.

            The major changes are as follows:

  • The rules are now divided into two major parts so that Property and Casualty claims are now regulated under a separate section from non-property/casualty claims.
  • The Property and Casualty part includes a section devoted to the definition of terms used in that section.
  • Communications time limits are mostly unchanged.  However, the length of time provided for an initial determination of coverage acceptance or denial of a claim has been extended from 10 working days to 30 days.  Of course, the carrier may still send a delay letter if additional time is required.
  • Regulations no longer prohibit a delay or denial of claim or basis of suspected fraud without notifying the Insurance Department of Suspicions.

Now a delay letter may simply inform the suspected claimant that “further investigation is needed to determine the validity of the claim” and a denial letter can merely explain that the claim is denied because the damage did not occur in the manner reported by the claimant.

  • New wording for the required statement on claims communications is set out in the new regulations. Also, this new version must appear not only on 30 day delay letters but also in denial and reservation of rights letters.  That new language is as follows:

 We will, of course, be available to you to discuss the position we have taken. You may reach us at (insurance company toll free telephone number). If you are a New Hampshire resident; if your policy insures property located in New Hampshire; or if you have been injured/your property has been damaged by a New Hampshire resident and you wish to take this matter up with the New Hampshire Insurance Department, it maintains a consumer services division to assist consumers with complaints at 21 South Fruit Street, Suite 14, Concord, NH, 03301. The New Hampshire Insurance Department can be reached, toll free, by dialing 1-800-852-3416

  • Also revised is the required statement for when an insurer and repair facility cannot agree upon a repair cost.  The statement to the claimant must now read:

Under New Hampshire law, you are always entitled to use the repair shop or facility of your choice. Unfortunately, we have been unable to agree on price with the facility you have chosen. In this situation, New Hampshire law provides that our payment for repair cost may be limited to the price available from a recognized, competent and conveniently located independent repair shop or facility that is willing and able to repair the damaged motor vehicle within a reasonable time. You may be responsible for the difference between our payment and the price charged to you by the facility you have chosen. Upon your request, we will furnish a written disclosure of the factual basis for our determination of the fair and reasonable price. If you are our insured and disagree with our determination of the amount of loss, you are entitled to exercise the appraisal provision of your policy.

  • The regulations for property damage claims are divided into separate rules for motor vehicle and non-motor vehicle claims.  The major difference between the two is that the non-motor vehicle property damage rules do not have provisions governing the use of after-market parts, price disputes with repair facilities or loss of use/coverage for rentals.
  • Motor vehicle and non-motor vehicle property damage claim rules governing guarantees of workmanship and materials, prohibiting steering to particular repairers, requiring coverage for hidden damage and prohibiting intimidation to influence claimant’s choice of repairer are all similar to the old rules.
  • The new regulations set up a new procedure by which the Insurance Department can approve specific processes or methodologies for determining fair market value based on average retail value in motor vehicle total loss claims.
  • The rules also set up 3 alternative methods for total loss evaluations, one based on average costs for similar make, model and year, another based on sales costs of similar kind and quality of vehicle and the third is based on average dealership quotes.
  • Total loss offers for motor vehicle claims must now include a statement of evaluation, the one that is used by the insurer.
  • The rules also require a recalculation of a total loss offer when the claimant presents evidence of a higher cash value in the local area market from two reliable sources (defined in the rule) within 15 days of the offer.
  • The regulations now specify that salvage value may be reduced from the settlement payment if the claimant elects to keep a totaled vehicle.
  • A new rule prohibits denying a claim for the insured’s failure to comply with the policy terms unless the insurer establishes that it was a material breach that excuses the insurer from performing and documents the basis for the conclusion that the breach was material.
  • For non-motor vehicle property claims, the insurer must now provide the claimant with a written statement providing referral to willing-and-able contractor who can perform the work for the amount of the offer.  Like with auto claims, the use of that contractor is at claimant’s discretion, but must bear the excess expense if he goes with his own contractor who is more expensive.  Likewise, if insurer cannot identify a willing-and-able contractor, then the insurer must bear the increase expense over the settlement offer.

If your company would like a presentation on the new Property/Casualty rules for a more in depth review of the new rules, please contact Michael Wallenius at 603-634-4300.


Mike Wallenius




Attorneys at Law

1838 Elm Street, Manchester, NH 03104
Ph 603.634.4300 - Fax 603.626.3647

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