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ENGROSSED HOUSE
BILL NO. 4488 By: Townley of the House
and
Hamilton of the Senate
[ insurance - motor vehicle - total loss or damage
claim - appraisal process - motor vehicle insurance
policies – disputes – codification - effective date
]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 1250.8, is
amended to read as follows:
Section 1250.8. A. If an insurance policy or insurance
contract provides for the adjustment and settlement of first-party
motor vehicle total losses, on the basis of actual cash value or
replacement with another of like kind and quality, one of the
following methods shall apply:
1. An 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 the transfer of evidence of ownership of the motor
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vehicle paid, at no cost to the insured other than any deductible
provided in the policy. The offer and any rejection thereof shall
be documented in the claim file; or
2. An insurer may elect a cash settlement based upon the actual
cost, less any deductible provided in the policy, to purchase a
comparable motor vehicle, including all applicable taxes, license
fees and other fees incident to a transfer of evidence of ownership,
or a comparable motor vehicle. Such cost may be determined by:
a. the cost of a comparable motor vehicle in the local
market area when a comparable motor vehicle is
currently or recently available in the prior ninety
(90) days in the local market area,
b. one of two or more quotations obtained by an insurer
from two or more qualified dealers located within the
local market area when a comparable motor vehicle is
not available in the local market area, or
c. the cost of a comparable motor vehicle as quoted in
the latest edition of the National Automobile Dealers
Association Official Used Car Guide or monthly edition
of any other nationally recognized published
guidebook.
B. If a first-party motor vehicle total loss is settled on a
basis which deviates from the methods described in subsection A of
this section, or the process outlined in Section 2 of this act, the
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deviation shall be supported by documentation giving particulars of
the condition of the motor vehicle. Any deductions from such cost,
including, but not limited to, deduction for salvage, shall 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 a first-party claimant.
C. If liability for motor vehicle damages is reasonably clear,
insurers shall not recommend that third-party claimants make claims
pursuant to the third-party claimants' own policies solely to avoid
paying claims pursuant to such insurer's insurance policy or
insurance contract.
D. Insurers shall not require a claimant to travel unreasonably
either to inspect a replacement motor vehicle, obtain a repair
estimate or have the motor vehicle repaired at a specific repair
shop.
E. Insurers shall, upon the request of a claimant, include the
deductible of a first-party claimant, if any, in subrogation
demands. Subrogation recoveries shall be shared on a proportionate
basis with a first-party claimant, unless the deductible amount has
been otherwise recovered. No deduction for expenses shall be made
from a deductible recovery unless an outside attorney is retained to
collect such recovery. The deduction shall then be made for only a
pro rata share of the allocated loss adjustment expense.
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F. If an insurer prepares an estimate of the cost of automobile
repairs, such estimate shall be in an amount for which it reasonably
may be expected that the damage can be repaired satisfactorily. An
insurer shall give a copy of an estimate to a claimant and may
furnish to the claimant the names of one or more conveniently
located repair shops, if requested by the claimant.
G. If an 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.
H. An insurer or its representative shall not require a
claimant to obtain motor vehicle repairs at a specific repair
facility. An insurer or its representative shall not require a
claimant to obtain motor vehicle glass repair or replacement at a
specific motor vehicle glass repair or replacement facility. An
insurer shall fully and promptly pay for the cost of the motor
vehicle repair services or products, less any applicable deductible
amount payable according to the terms of the policy. The claimant
shall be furnished an itemized priced statement of repairs by the
repair facility at the time of acceptance of the repaired motor
vehicle. Unless a cash settlement is made, if a claimant selects a
motor vehicle repair or motor vehicle glass repair or replacement
facility, the insurer shall provide payment to the facility or
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claimant based on a competitive price, as established by that
insurer through market surveys or by the insured through competitive
bids at the insured's option, to determine a fair and reasonable
market price for similar services. Reasonable deviation from this
market price is allowed based on the facts in each case.
I. An insurer shall not use as a basis for cash settlement with
a first-party claimant an amount which is less than the amount which
an insurer would pay if repairs were made, other than in total loss
situations, unless such amount is agreed to by the insured.
J. An insurer shall not force a claimant to execute a full
settlement release in order to settle a property damage claim
involving a personal injury.
K. All payment or satisfaction of a claim for a motor vehicle
which has been transferred by title to the insurer shall be paid by
check, draft or electronic payment, payable on demand.
L. In the event of payment of a total loss to a third-party
claimant, the insurer shall include any registered lienholder as
copayee to the extent of the lienholder's interest.
M. As used in this section, "total loss" means that the vehicle
repair costs plus the salvage value of the vehicle meets or exceeds
the actual cash value of the motor vehicle prior to the loss, as
provided in used automobile dealer guidebooks.
N. An insurer shall not offer a cash settlement as provided in
paragraph 2 of subsection A of this section for the purchase of a
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comparable motor vehicle and then subsequently sell the motor
vehicle which has been determined to be a total loss back to the
claimant if the insurer has determined that the repair of the
vehicle would not result in the vehicle being restored to operative
condition as provided in Section 1111 of Title 47 of the Oklahoma
Statutes unless the claimant specifies in writing or via an
electronic signature that the claimant understands that the motor
vehicle shall be titled as a "junked vehicle".
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 1250.8a of Title 36, unless
there is created a duplication in numbering, reads as follows:
A. As used in this section:
1. "Appraiser" means a person selected by the insurer or the
insured to place a value on or estimate the amount of loss under an
appraisal clause in an insurance contract;
2. "Competent" means the person has subject matter expertise,
relevant training, and experience to make decisions and valuations
relating to the amount of loss; and
3. "Disinterested" means the person does not have a direct
financial interest in the outcome of the appraisal process.
B. Every motor vehicle insurance policy that includes first-
party coverage for physical damage issued or renewed effective on or
after January 1, 2027, shall include a provision for the right to an
appraisal to resolve disputes between the insurer and the insured
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regarding the actual cash value and amount of loss on the damaged
automobile. The appraisal clause shall include the following
language, or corresponding language that the insurer certifies is at
least as favorable to the insured:
"1. If you and we fail to agree on the amount of loss, either
party may make written demand for an appraisal;
2. Each party will select an appraiser and notify the other
party of the identity of each appraiser within twenty (20) days
after the demand is received;
3. The appraisers will select a competent and impartial umpire;
4. If the appraisers are unable to agree upon an umpire within
fifteen (15) days after receiving notice of the identity of the
appraisers pursuant to item 2. above, you or we can ask a judge of a
court of record in the county where your residence is located to
select an umpire;
5. The appraisers shall then appraise the loss and submit to us
written reports stating separately the loss to each item;
6. If the reports of the appraisers are in agreement, we will
pay the agreed upon amount;
7. If the appraisers cannot agree, they will submit reports to
the umpire, and we will pay the amount agreed upon by any two; and
8. Each party will pay the appraiser it has chosen and will pay
an equal share of the expenses for the umpire and all other expenses
of the appraisal."
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C. Neither party may demand an appraisal until ten (10) days
after the insurer receives notification of the claim.
SECTION 3. This act shall become effective November 1, 2026.
Passed the House of Representatives the 25th day of March, 2026.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2026.
Presiding Officer of the Senate