85R9057 SCL-F
By: Hancock S.B. No. 878
A BILL TO BE ENTITLED
AN ACT
relating to limited driver personal automobile insurance policies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 1952, Insurance Code, is
amended by adding Section 1952.060 to read as follows:
Sec. 1952.060. LIMITED DRIVER POLICIES. (a) In this
section:
(1) "Household" means a unit of individuals living
together in the same dwelling, without regard to whether the
individuals are related to each other.
(2) "Named driver only policy" means a personal
automobile insurance policy that covers an automobile owned by the
named insured, provides coverage only for a driver specifically
named in the policy, and does not provide coverage for a permissive
user of a covered automobile who is not named in the policy.
(3) "Named household member policy" means a personal
automobile insurance policy that covers an automobile owned or
operated by the named insured and contains an exclusion of coverage
or has been endorsed to contain an exclusion of coverage for a
household member of the named insured unless the member is
specifically named in the policy. The term does not include:
(A) an owner's policy that provides coverage for
each individual residing in a named insured's household unless the
individual is specifically excluded; or
(B) a named driver only policy.
(b) In addition to the insurers to whom this chapter applies
under Section 1952.001, this section applies to a county mutual
insurance company.
(c) An insurer may not deliver, issue for delivery, or renew
a named driver only policy.
(d) Before the issuance or renewal of a named household
member policy or an endorsement to a policy that converts the policy
to a named household member policy, an agent or insurer must make
the following written disclosure to the applicant or insured:
WARNING: THIS POLICY IS A NAMED HOUSEHOLD MEMBER
POLICY AND DOES NOT PROVIDE COVERAGE FOR INDIVIDUALS
RESIDING IN THE INSURED'S HOUSEHOLD THAT ARE NOT
DISCLOSED TO THE INSURER AND NAMED ON THE POLICY.
(e) The exclusion of coverage for an unnamed household
member in a named household member policy is effective on the date
that a named insured signs a copy of the disclosure described by
Subsection (d).
(f) A signature required by this section must be an original
signature or an electronic signature that complies with Chapter
322, Business & Commerce Code, and Chapter 35 of this code. For
purposes of this section, the signature of any named insured is
binding on all named insureds and drivers listed on the policy.
SECTION 2. Section 601.076, Transportation Code, is amended
to read as follows:
Sec. 601.076. REQUIRED TERMS: OWNER'S POLICY. (a) An
owner's motor vehicle liability insurance policy must:
(1) cover each motor vehicle for which coverage is to
be granted under the policy; and
(2) pay, on behalf of the named insured or another
person who, as insured, uses a covered motor vehicle with the
express or implied permission of the named insured, amounts the
insured becomes obligated to pay as damages arising out of the
ownership, maintenance, or use of the motor vehicle in the United
States or Canada, subject to the amounts, excluding interest and
costs, and exclusions of Section 601.072.
(b) A named household member policy as defined by Section
1952.060, Insurance Code, does not fail to meet the requirements of
this section solely because the policy or an endorsement to the
policy excludes coverage for unnamed household members of the named
insured.
SECTION 3. Section 601.081, Transportation Code, is amended
to read as follows:
Sec. 601.081. STANDARD PROOF OF MOTOR VEHICLE LIABILITY
INSURANCE FORM. (a) In this section, "named household member
[driver] policy" has the meaning assigned by Section 1952.060
[1952.0545], Insurance Code.
(b) A standard proof of motor vehicle liability insurance
form prescribed by the Texas Department of Insurance must include:
(1) the name of the insurer;
(2) the insurance policy number;
(3) the policy period;
(4) the name and address of each insured;
(5) the policy limits or a statement that the coverage
of the policy complies with the minimum amounts of motor vehicle
liability insurance required by this chapter;
(6) the make and model of each covered vehicle; and
(7) for a named household member [driver] policy:
(A) [,] the required disclosure under Section
1952.060 [1952.0545], Insurance Code; and
(B) the make and model of each vehicle owned by
each named insured.
SECTION 4. Section 1952.0545, Insurance Code, is repealed.
SECTION 5. The changes in law made by this Act apply only to
an insurance policy that is delivered, issued for delivery, or
renewed on or after January 1, 2018. A policy delivered, issued for
delivery, or renewed before January 1, 2018, is governed by the law
as it existed immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
SECTION 6. This Act takes effect September 1, 2017.