HLS 10RS-1424 REENGROSSED
Page 1 of 4
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2010
HOUSE BILL NO. 581
BY REPRESENTATIVE KLECKLEY
INSURANCE/POLICIES: Provides for vehicle component coverage contracts
AN ACT1
To amend and reenact R.S. 22:361(7) and (8) and 364(introductory paragraph) and to enact2
R.S. 22:361(9) and (10) and 364(B), relative to vehicle mechanical breakdown3
insurers; to provide a definition of road hazard and vehicle component coverage4
contracts; to provide an exception to the licensing requirements for vehicle5
mechanical breakdown insurers; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 22:361(7) and (8) and 364(introductory paragraph) are hereby8
amended and reenacted and R.S. 22:361(9) and (10) and 364(B) are hereby enacted to read9
as follows: 10
§361. Definitions11
As used in this Subpart:12
* * *13
(7) "Road hazard" shall include but not be limited to potholes, rocks, curbs,14
wood debris, other debris, nails, screws, bolts, metal parts, or glass; however, "road15
hazard" shall not include any damage caused by collision with another vehicle,16
vandalism, or other causes usually covered under the comprehensive or collision17
coverages provided by an automobile physical damage policy.18
(8) "Vehicle component coverage contracts" means a contract which19
provides the owner or purchaser of a motor vehicle with one or more of the20
following coverages:21 HLS 10RS-1424 REENGROSSED
HB NO. 581
Page 2 of 4
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(a) "Paintless dent repair contract" means a contract which provides for the1
repair of or promises to pay for all or part of the cost to repair or remove dents,2
dings, or creases from the exterior of the motor vehicle utilizing the paintless dent3
repair process, provided that a paintless dent repair contract shall not cover sanding,4
bonding, painting, or the replacement of body panels.5
(b) "Tire and wheel contract" means a contract which promises to pay for all6
or part of the cost to repair or replace tires and wheels which are damaged due to7
contact with a road hazard.8
(c) "Windshield contract" means a contract which promises to pay for all or9
part of the cost of the repair or of the replacement of windshield or window glass on10
a motor vehicle when the damage to the glass is caused by contact with a road11
hazard.12
(7) (9) "Vehicle mechanical breakdown insurance policy" means any13
contract, agreement, or instrument whereby a person other than the owner, seller, or14
lessor of a vehicle assumes the risk of and or or the expense or portion thereof for the15
mechanical breakdown or mechanical failure of a motor vehicle and may include16
other customer assistance and convenience services, such as vehicle rental assistance,17
towing assistance, trip interruption, and roadside assistance, and shall include those18
agreements commonly known as vehicle service agreements or extended warranty19
agreements.20
(8) (10) "Vehicle mechanical breakdown insurer" means any person or21
organization, whether domestic, foreign, or alien, issuing or attempting to issue22
vehicle mechanical breakdown policies or vehicle component coverage contracts as23
defined herein.24
* * *25
§364. Qualifications26
A. The commissioner shall not license a vehicle mechanical breakdown27
insurer unless all of the following conditions are met:28
* * *29 HLS 10RS-1424 REENGROSSED
HB NO. 581
Page 3 of 4
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
B. The requirement for licensure shall not apply to tire and wheel coverage1
sold as a part of a service package in concert with the sale of one or more tires or one2
or more wheels.3
Section 2. This Act shall become effective upon signature by the governor or, if not4
signed by the governor, upon expiration of the time for bills to become law without signature5
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If6
vetoed by the governor and subsequently approved by the legislature, this Act shall become7
effective on the day following such approval.8
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)]
Kleckley HB No. 581
Abstract: Provides relative to the sale of vehicle component coverage contracts.
Proposed law defines "road hazard" as including but not limited to potholes, rocks, curbs,
wood debris, other debris, nails, screws, bolts, metal parts, or glass. Specifies that the
definition of "road hazard" does not include any damage caused by collision with another
vehicle, vandalism, or other causes usually covered under the comprehensive or collision
coverages provided by an automobile physical damage policy. Also, defines "vehicle
component coverage contracts" as a contract which provides the owner or purchaser of a
motor vehicle with one or more of the following coverages:
(1)"Paintless dent repair contract" means a contract which provides for the repair of or
promises to pay for all or part of the cost to repair or remove dents, dings or creases
from the exterior of the motor vehicle utilizing the paintless dent repair process,
provided that a paintless dent repair contract shall not cover sanding, bonding,
painting, or the replacement of body panels.
(2)"Tire and wheel contract" means a contract which promises to pay for all or part of
the cost to repair or replace tires and wheels which are damaged due to contact with
a road hazard.
(3)"Windshield contract" means a contract which promises to pay for all or part of the
cost of the repair or of the replacement of windshield or window glass on a motor
vehicle when the damage to the glass is caused by contact with a road hazard.
Present law defines "vehicle mechanical breakdown insurance policy" as any contract,
agreement, or instrument whereby a person other than the owner, seller, or lessor of a vehicle
assumes the risk of and/or the expense or portion thereof for the mechanical breakdown or
mechanical failure of a motor vehicle and other customer assistance and convenience
services, such as vehicle rental assistance, towing assistance, trip interruption, and roadside
assistance, and includes those agreements commonly known as vehicle service agreements
or extended warranty agreements. HLS 10RS-1424 REENGROSSED
HB NO. 581
Page 4 of 4
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Proposed law specifies that a "vehicle mechanical breakdown insurance policy" may also
include other assistance and services.
Present law defines "vehicle mechanical breakdown insurer" as any person or organization,
whether domestic, foreign, or alien, issuing or attempting to issue vehicle mechanical
breakdown polices as defined in present law.
Proposed law adds "vehicle component coverage contracts" to the definition of "vehicle
mechanical breakdown insurer". Makes technical changes.
Proposed law provides an exception to the vehicle mechanical breakdown insurers licensing
requirements for tire and wheel coverage sold as a part of a service package in concert with
the sale of one or more tires or one or more wheels.
Effective upon signature of governor or lapse of the time for gubernatorial action.
(Amends R.S. 22:361(7) and (8) and 364(intro. para.); Adds R.S. 22:361(9) and (10) and
364(B))
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Insurance to the original
bill.
1. Removed a provision that prohibited a paintless dent repair contract from
providing coverage that is usually provided by the comprehensive or collision
coverage of an automobile physical damage policy.
2.Clarified the definition of vehicle mechanical breakdown insurance policy by
specifying that the contract, agreement, or instrument providing for an
assumption of risk for the expense or for the mechanical breakdown or
mechanical failure of a motor vehicle may include other customer assistance and
convenience services.
3. Removed vehicle component coverage from the definition of vehicle mechanical
breakdown insurance policy. Instead, added vehicle component coverage
contracts to the definition of vehicle mechanical breakdown insurer.
4. Removed a provision that authorizes a licensed vehicle mechanical breakdown
insurer to sell vehicle mechanical breakdown policies, or vehicle component
coverage contracts if they are sold in conjunction with the purchase of a motor
vehicle or the purchase of one or more tires or one or more wheels for a motor
vehicle.
5. Made technical changes.
6. Added an exception to the vehicle mechanical breakdown insurers licensing
requirements for tire and wheel coverage sold as a part of a service package in
concert with the sale of one or more tires or one or more wheels.