Relating to coverage of certain persons under an automobile insurance policy.
Impact
The bill amends the Insurance Code and Transportation Code to enhance consumer protection regarding automobile insurance in Texas. By requiring insurers to provide clear disclosures before accepting premiums for named driver policies, this legislation aims to eliminate confusion among policyholders about who is covered under their insurance. This change seeks to reduce the occurrence of uninsured drivers in households where individuals may mistakenly believe they are covered when they are not named in the policy. The bill’s provisions will take effect starting January 1, 2014, and will apply to all new and renewed insurance policies thereafter.
Summary
SB1567 addresses the requirements for automobile insurance policies in Texas, particularly focusing on the coverage of individuals residing in the insured's household. This legislation mandates that agents and insurers cannot issue personal automobile insurance policies without including a minimum level of coverage that meets state requirements. Additionally, the bill introduces specific guidelines for named driver policies, which only cover individuals explicitly named in the policy, leaving residents of the same household without coverage unless they are named. The intent is to ensure consumers are aware of any limitations in their coverage, promoting clarity and transparent practices in the insurance industry.
Contention
While SB1567 aims to protect consumers, it also raises concerns among insurers about the administrative burden it may impose. Insurers will need to adopt new disclosure processes and adjust policy documents to comply with the new requirements, which may lead to increased costs. Additionally, some opposition may arise from stakeholders worried that such regulations could restrict flexibility in policy offerings. However, supporters argue that the benefits of having well-informed consumers far outweigh potential downsides, as it will decrease the number of uninsured drivers and ensure that people understand their coverage limitations.
Relating to a pool for certain individuals with claims against persons excluded from coverage by certain automobile insurance policies; authorizing an assessment.