SECTION 1.  Section 34O (2) of Chapter 90 of the General Laws is hereby amended by deleting the twelfth paragraph, and inserting, in place thereof, the following:-

            Subject to such stated limits and conditions, exclusions, and limitations as may be approved by the commissioner, the insurer shall offer additional coverage, optional to the insured, for resulting loss of use of the insured vehicle, or diminished value of the insured vehicle resulting from a collision at the fault of an identified negligent third party.

SECTION 2.  Section 34O (2) of chapter 90 of the General Laws is hereby further amended by deleting the fourteenth paragraph, and inserting in place thereof, the following:-

            Notwithstanding the previous paragraph or any other law, an insurer shall file a plan for approval by the commissioner providing for direct payment by the insurer to the insured for the loss of or damage to the insured motor vehicle, or diminished value of the insured vehicle resulting from a collision at the fault of an identified negligent third party, under collision coverage or limited collision coverage policies prior to receipt by the insurer of a claim form from the insured stating that the repair work described in an appraisal made pursuant to regulations promulgated by the auto damage appraisers licensing board has been completed.  Such plan shall not be approved unless it: (a) provides for a procedure acceptable to the commissioner to resolve any dispute between the insured and the insurer as to the adequacy of the payment; (b) provides for adequate disclosure to the insured of his or her rights hereunder; and (c) contains such other terms and conditions as the commissioner shall prescribe.