Industry News

Rhode Island May Raise Its Total Loss Threshold to 85% — Here’s What That Means

This article is commentary by the CCA team on recent reporting from Repairer Driven News.

Rhode Island’s legislature has passed two bills — SB 3115 and HB 7866 — that would raise the state’s total loss threshold from 80% to 85% of fair market value. The bills now await Governor Dan McKee’s signature.

If signed, Rhode Island would have one of the highest total loss thresholds in the country.

What This Means in Plain English

The total loss threshold determines when an insurance company can declare your vehicle a total loss instead of repairing it. Currently in Rhode Island, if the repair cost exceeds 80% of your vehicle’s value, the insurer can total it.

Under the new law, that number goes up to 85%. In practice, this means more vehicles would be repaired instead of totaled.

A Quick Example

Say your vehicle is worth $20,000.

• At 80% threshold: Repairs exceeding $16,000 = total loss
• At 85% threshold: Repairs exceeding $17,000 = total loss

That $1,000 difference means some vehicles that would have been totaled under the old rule could now be repaired — keeping the owner in their vehicle instead of being forced into the used car market.

Why This Matters to Consumers

Senator Hannal Gallo, a bill sponsor, put it simply: “With the retail cost of new and used cars being prohibitive for many consumers, it is vital that they have a choice.”

She’s right. When your vehicle is totaled, the insurance company pays you the ACV — which may or may not be enough to replace your vehicle with something comparable. In today’s market, where used car prices remain elevated, a total loss declaration can leave vehicle owners financially underwater.

A higher threshold gives consumers more control. If the vehicle can be safely repaired, the owner should have that option.

The Insurance Industry’s Response

Predictably, the insurance industry opposes the change. The Governor’s Insurance Council argues the bills would:

• Increase vehicle insurance costs
• Add nearly $1 million in annual repair costs statewide
• Result in “less safe” heavily damaged vehicles being repaired instead of totaled

Insurance lobbyist Chris Stark noted that Rhode Island already raised its threshold from 75% to 80% just last year, calling the threshold “one of the last cost constraints” in the market.

Our Take

The safety argument deserves consideration — a vehicle with extensive structural damage may genuinely be better off totaled than repaired. But that decision should be based on the nature of the damage, not an arbitrary percentage.

A cosmetic-heavy repair bill that hits 82% of ACV isn’t a safety risk. A structural repair at 70% might be. The threshold is a blunt instrument that doesn’t distinguish between the two.

As for the cost argument — $1 million spread across all Rhode Island policyholders is pennies per policy. And the alternative is forcing consumers into a used car market where replacement vehicles cost more than the ACV check they received.

We’ll be watching to see whether Governor McKee signs these bills. Regardless of the outcome, the trend is clear: states are starting to push back on thresholds that make it too easy for insurers to total vehicles consumers would rather keep.

Related Resources

• What Is a Total Loss? — How total losses are determined, including threshold breakdowns by state.
• How Insurance Determines Your Vehicle’s Value — Where the ACV calculation goes wrong.
• Should I Keep My Totaled Vehicle? — Your options after a total loss declaration.