HLS 10RS-1281 ORIGINAL
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2010
HOUSE BILL NO. 1011
BY REPRESENTATIVE HARRISON
INSURANCE/AUTOMOBILE: Provides relative to the adjustment and settlement of first-
party motor vehicle total losses
AN ACT1
To enact R.S. 22:1892(B)(5), relative to property and casualty insurance claims payment;2
to provide for the adjustment and settlement of first-party motor vehicle total losses;3
to provide a definition; and to provide for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 22:1892(B)(5) is hereby enacted to read as follows: 6
ยง1892. Payment and adjustment of claims, policies other than life and health and7
accident; personal vehicle damage claims; extension of time to respond to claims8
during emergency or disaster; penalties; arson-related claims suspension9
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B.11
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(5) When an insurance policy provides for the adjustment and settlement of13
first-party motor vehicle total losses on the basis of actual cash value or replacement14
with another of like kind and quality, and the insurer elects a cash settlement based15
on the actual cost to purchase a comparable motor vehicle, such costs shall be16
derived by using the following:17
(a) The highest estimate of two or more estimates obtained by the insurer18
from two or more qualified dealers, which engage in the buying and selling of19
comparable motor vehicles, located in the local market area.20
(b) The retail cost as determined from a generally recognized used motor21
vehicle industry source; such as, an electronic database, if the valuation documents22 HLS 10RS-1281 ORIGINAL
HB NO. 1011
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
generated by the database are provided to the first-party claimant, or a guidebook1
that is available to the general public. If the insured demonstrates, by presenting two2
independent appraisals, based on measurable and discernable factors, that the vehicle3
would have a higher cash value in the local market area than the value reflected in4
the source's database or the guidebook, the local market value shall be used in5
determining the actual cash value.6
(c) For the purposes of this Paragraph, local market area shall mean a7
reasonable distance surrounding the area where a motor vehicle is principally8
garaged, or the usual location of the vehicle covered by the policy.9
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Harrison HB No. 1011
Abstract: Provides for the adjustment and settlement of first-party motor vehicle total
losses.
Proposed law provides that when an insurance policy provides for the adjustment and
settlement of first-party motor vehicle total losses on the basis of actual cash value or
replacement with another of like kind and quality, and the insurer elects a cash settlement
based on the actual cost to purchase a comparable motor vehicle, such costs shall be derived
by using the following:
(1) The highest estimate of two or more estimates obtained by the insurer from two or
more qualified dealers which engage in the buying and selling of comparable motor
vehicles, located in the local market area.
(2) The retail cost as determined from a generally recognized used motor vehicle
industry source; such as, an electronic database, if the valuation documents generated
by the database are provided to the first-party claimant, or a guidebook that is
available to the general public. If the insured demonstrates, by presenting two
independent appraisals, based on measurable and discernable factors, that the vehicle
would have a higher cash value in the local market area than the value reflected in
the source's database or the guidebook, the local market value shall be used in
determining the actual cash value.
Proposed law defines local market area as a reasonable distance surrounding the area where
a motor vehicle is principally garaged, or the usual location of the vehicle covered by the
policy.
(Adds R.S. 22:1892(B)(5))