Many insurance professionals, including some members of Merlin Law Group, will be gathering in Warwick, Rhode Island next week (Oct. 21-23) for the First Party Claims Conference. Those attending the conference in Rhode Island will hear from speakers on various insurance claim topics and will be learn about recent developments in the insurance industry.
In continuing with the state-by-state series on total loss standards, this week I turn to Rhode Island. Many of us probably know little about this state. Rhode Island is known for several “firsts.” It was the first of the thirteen original colonies to declare independence form British rule, the first state to enact a law prohibiting slavery and the state where the first NFL night game was played.1
In my research of Rhode Island case law, I did not come across any authorities that specifically defined “total loss” in the context of a property damage claim. In surveying Rhode Island law, total loss does not require complete destruction. In other words, the fact that the property still exists after the loss does not preclude a finding of total loss.2 One of the considerations appears to be whether the property is salvageable; if the property is salvageable, then that would cut against the argument that it is a total loss.3 In determining what constitutes a total loss, most states have adopted either the “identity” test (building after the loss has lost its identity or special character) or the “prudent person” test (key consideration is the reasonableness or practicality of the repair). Based on what I have found, it seems that Rhode Island would lean slightly towards applying the latter.
2 Pearlman v. Equitable Fire & Marine Ins. Co., 88 R.I. 291, 147 A. 2d 909 (R.I. 1959).