The Vermont Department of Financial Regulation and its Insurance Division have revised Insurance Bulletin 206, extending its guidance on virtual adjustment beyond private passenger auto to all lines of insurance. The update reflects insurers' growing reliance on remote inspections across property, commercial, specialty, and other segments.
The bulletin reiterates insurers' statutory duties under Vermont law to conduct reasonable investigations and make prompt, fair, and equitable settlements once liability is reasonably clear. Regulators acknowledge that virtual adjusting can speed up settlements and reduce expenses. At the same time, the Department states there is compelling evidence that photographs and video alone may fail to reveal the true extent of damage, particularly where hidden or structural issues are involved.
For claims adjusters, the most significant operational shift is the explicit requirement to provide an in-person inspection by a licensed adjuster within a reasonable period if a claimant requests it or if virtual handling is not appropriate. Carriers cannot deny an in-person inspection simply because a claimant initially agreed to virtual adjustment. Delays in arranging a field inspection could be viewed as a violation of Vermont's unfair claims settlement practices statute.
The bulletin also emphasizes that virtual adjustment is not appropriate where there is a reasonable basis to believe damages cannot be fully assessed without a site visit. This is particularly relevant in property losses involving hidden water intrusion, structural damage, or business interruption exposures, as well as complex liability claims. Insurers remain obligated to identify and pay for all covered hidden damages attributable to the loss.
For auto total losses, the Department clarifies that deductions for reconditioning or tune-up costs must be based on an actual in-person inspection by a Vermont-licensed adjuster or appraiser. Virtual evidence does not meet this threshold. Condition deductions must exceed normal wear and tear, cannot include engine or transmission cleaning, and cannot apply to tires that meet inspection standards. All deductions must be detailed in the valuation report provided to the consumer.
For adjusters and claims managers, the guidance signals increased scrutiny of desk adjusting protocols, documentation practices, and escalation procedures. Carriers writing in Vermont should review claim triage criteria, ensure clear consumer disclosures about inspection rights, and document decisions when virtual handling is deemed sufficient. Compliance teams may also want to audit total loss valuation files to confirm condition deductions meet the in-person inspection standard.
