The National Association of Insurance Commissioners (NAIC) drafted a model law named the “Unfair Claims Settlement Practices Act.” These standards include fair and rapid settlement of claims as well as the procedures and practices constituting unfair claim adjustment practices. Section 9 of the Model Act outlines language pertaining to the replacement of undamaged items when the damaged items cannot be replaced in a way that achieves a reasonably uninform appearance.

In 1999, Utah adopted portions of the NAIC Model Unfair Claims Practices Act to set forth the minimum standards for the investigation and disposition of property insurance claims under Rule 590-190. Among those portions adopted by Utah was Section 9 regarding matching. Rule 590-190-13 of Utah’s Administrative Code provides:

(1) Replacement Cost Value: When the policy provides for the adjustment and settlement of first party losses based on replacement cost, the following shall apply:

(b) when a loss requires replacement or repair of items and the repaired or replaced items do not match in color, texture, or size, the insurer shall repair or replace items so as to conform to a reasonably uniform appearance. This applies to interior and exterior losses. The insured is only responsible for the applicable deductible.

While there is a strong likelihood of argument with an insurer as to whether a repair provides a “reasonably uniform appearance,” Utah’s adoption of the matching portion of the NAIC Model Act under Rule 590-190-13 demonstrates its recognition of the inherent effect on value to property caused by mismatching repairs and suggests insurer’s have an obligation beyond repairing the direct physical damage of the property.

It should be noted that a violation of Utah’s Administrative Code does not create any private right of action in Utah.1 Instead, Rule 590-190-13 establishes a guideline for the insurance company to follow with regard to the payment of claims involving matching or uniformity which commonly arise where damaged materials have been discontinued. Violations of Utah’s Administrative Code may evidence the insurance company’s breach of duty under the implied covenant of good faith and fair dealing.
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1 UT ADC R590–190–1; Cannon v. Travelers Indem. Co., 994 P.2d 824, 828 (Utah Ct. App. 2000).

  • I would say the photo doesn’t involve “reasonable” matching! i likely conflicts with nonregulatory policy language like replacing with materials of “like kind.” We had some shingles around a dormer replaced and the shingle was exactly the same kind but the existing shingles were 12 years old. There was a slight difference but, unless you were looking for it, most people would not notice. So we were fine with it. In other words, WE were also being reasonable about the repair.