The Vermont Department of Financial Regulation and its Insurance Division have revised Insurance Bulletin 206 on virtual adjustment of insurance claims, broadening its application from motor vehicle partial and total loss claims to the settlement of all types of insurance claims, in response to insurers’ increased use of virtual adjusting across other lines.
The revised Insurance Bulletin 206 is dated February 12, 2026, and signed by Commissioner Kaj Samsom on February 17, 2026, but does not specify an effective date for the updated guidance. The Department of Financial Regulation reiterates that under Title 8 V.S.A. Section 4724(9)(D) insurers must conduct a reasonable claims investigation based upon all available evidence, and under Section 4724(9)(F) must make prompt, fair, and equitable settlements of claims in which liability has become reasonably clear. While the Department acknowledges that virtual claims adjustment systems may in some situations help settle claims more quickly and reduce costs for insurers, it states that there is compelling evidence that photographs, videos and other virtual representations do not always reveal the true extent of damage.
For insurers, adjusters, MGAs, brokers and compliance teams operating in Vermont, the Department of Financial Regulation now requires that insurers provide an in-person inspection of damages by a licensed adjuster within a reasonable period if a claimant requests it or if virtual adjusting is inappropriate, and specifies that virtual adjusting is not appropriate where there is a reasonable basis to believe the true extent of damages cannot be properly assessed without an in-person inspection. The Insurance Division underscores that this is particularly important given insurers’ obligation to advise claimants of and pay for all hidden damages attributable to the loss. Insurers may not deny a claimant’s request for an in-person inspection on the grounds that the claimant initially elected virtual adjustment, and the Department warns that unreasonable delays in making an adjuster available for an in-person inspection may, in certain circumstances, be considered a violation of Section 4724(9)(F).
For auto insurers adjusting total losses, the Department of Financial Regulation reiterates that deductions for reconditioning and tune-up costs may only be taken when justified and detailed as a result of an actual inspection by a licensed adjuster or appraiser, clarifying that actual inspection means an in-person inspection by a Vermont-licensed adjuster or appraiser rather than virtual evidence. The Department adds that condition deductions may only be taken where conditions exceed normal wear and tear, may not be taken for engine or transmission cleaning or for tires that meet inspection standards, and must be documented in detail on the valuation report provided to the consumer.
