Connecticut is tightening the rules on how insurers and consumers resolve disputes over auto damage claims.
Substitute House Bill 6435, passed in the state’s January 2025 session and effective October 1, 2025, strengthens the automobile arbitration process for physical and property damage claims involving private passenger vehicles. It applies when liability and coverage are not in dispute but disagreements over the amount persist.
Under the revised law, the Division of Consumer Affairs must operate an independent arbitration system for such disputes. All insurers licensed to write private passenger automobile insurance - including collision, comprehensive, and theft coverage - must participate.
Once the Insurance Department’s mediation efforts fail, an examiner can refer the complaint to arbitration. Each party pays a $20 filing fee, and insurers are required to immediately pay any undisputed amount upon notification of the referral.
A list of at least 10 eligible arbitrators - none of whom may have been employed by the department or any insurer in the prior 12 months - will be maintained. Arbitrators must belong to dispute resolution organizations approved by the commissioner. Cases will be heard based on list order, with the option to skip an arbitrator if they’re unavailable or challenged by either party.
Hearings are to be scheduled as needed, with at least 10 days’ written notice. Arbitrators may issue subpoenas and consult independent experts when required. Decisions must be issued within 15 days and include findings and remedies. The prevailing party receives a refund of the filing fee.
If a claimant prevails, the insurer must pay 15% annual interest on the disputed claim amount retroactive to the payment date of the undisputed portion. They must also cover the department’s administrative costs - unless the claimant previously rejected a settlement equal to or exceeding the award. Additional awards may include storage or loss-of-use costs, and all remedies must have a completion date.
The department cannot amend or reverse an arbitrator’s decision. Within 10 business days after the specified completion date, the department must contact the claimant to confirm compliance.
Parties can appeal to the superior court in their district for confirmation, vacating, or modification of awards. If a party’s position improves by 10% or more through court review, they may be awarded reasonable attorney’s fees and costs.
The law prohibits introducing arbitration records in civil proceedings, except during judicial review. The department must keep and annually report detailed arbitration statistics to the legislature.
