| 1 | 1 | | 2019S0329-1 03/04/19 |
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| 2 | 2 | | By: Menéndez S.B. No. 1737 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to continuation of automobile insurance coverage for |
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| 8 | 8 | | temporary substitute vehicles during a personal automobile |
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| 9 | 9 | | insurance policy term. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Subchapter B, Chapter 1952, Insurance Code, is |
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| 12 | 12 | | amended by adding Section 1952.060 to read as follows: |
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| 13 | 13 | | Sec. 1952.060. REQUIRED PROVISION: LIABILITY COVERAGE FOR |
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| 14 | 14 | | TEMPORARY SUBSTITUTE VEHICLES DURING POLICY TERM. (a) This |
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| 15 | 15 | | section applies to an insurer authorized to write automobile |
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| 16 | 16 | | insurance in this state, including an insurance company, reciprocal |
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| 17 | 17 | | or interinsurance exchange, mutual insurance company, capital |
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| 18 | 18 | | stock company, county mutual insurance company, Lloyd's plan, or |
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| 19 | 19 | | other entity. |
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| 20 | 20 | | (b) In this section: |
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| 21 | 21 | | (1) "Repair facility" means a person that engages in |
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| 22 | 22 | | the business of servicing, repairing, or replacing a motor vehicle |
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| 23 | 23 | | for consideration or in accordance with a warranty, service |
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| 24 | 24 | | contract, or maintenance contract. |
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| 25 | 25 | | (2) "Resident relative" means an individual who: |
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| 26 | 26 | | (A) resides in the same household as the insured; |
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| 27 | 27 | | and |
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| 28 | 28 | | (B) is related to the insured within the third |
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| 29 | 29 | | degree by consanguinity or affinity, as determined under Chapter |
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| 30 | 30 | | 573, Government Code. |
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| 31 | 31 | | (3) "Temporary substitute vehicle" means a motor |
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| 32 | 32 | | vehicle that is: |
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| 33 | 33 | | (A) loaned or provided without charge by a repair |
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| 34 | 34 | | facility to the insured while a vehicle owned by the insured is |
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| 35 | 35 | | being serviced, repaired, or replaced, including a vehicle loaned |
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| 36 | 36 | | or provided following the theft of a vehicle owned by the insured; |
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| 37 | 37 | | and |
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| 38 | 38 | | (B) not owned by the insured, a resident |
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| 39 | 39 | | relative, or any individual who resides in the same household as the |
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| 40 | 40 | | insured. |
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| 41 | 41 | | (c) A personal automobile insurance policy must contain a |
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| 42 | 42 | | provision to provide primary liability coverage in accordance with |
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| 43 | 43 | | this section for a temporary substitute vehicle during the policy |
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| 44 | 44 | | term. |
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| 45 | 45 | | (d) Coverage under this section is required only for a |
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| 46 | 46 | | vehicle that is: |
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| 47 | 47 | | (1) a private passenger automobile; or |
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| 48 | 48 | | (2) a pickup, utility vehicle, or van with a gross |
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| 49 | 49 | | vehicle weight of 25,000 pounds or less that is not used for the |
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| 50 | 50 | | delivery or transportation of goods, materials, or supplies, other |
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| 51 | 51 | | than samples, unless: |
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| 52 | 52 | | (A) the delivery of the goods, materials, or |
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| 53 | 53 | | supplies is not the primary use for which the vehicle is employed; |
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| 54 | 54 | | or |
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| 55 | 55 | | (B) the vehicle is used for farming or ranching. |
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| 56 | 56 | | (e) Coverage under this section must provide primary, not |
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| 57 | 57 | | excess, coverage subject to the same financial and territorial |
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| 58 | 58 | | limits of the policy, including coverage against damage to a |
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| 59 | 59 | | temporary substitute vehicle and against property damage and bodily |
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| 60 | 60 | | injury claimed by a third party. |
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| 61 | 61 | | (f) Coverage under this section must insure against loss |
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| 62 | 62 | | from liability for damages arising out of the use of a temporary |
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| 63 | 63 | | substitute vehicle: |
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| 64 | 64 | | (1) by the insured; and |
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| 65 | 65 | | (2) unless the policy is a named driver policy under |
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| 66 | 66 | | Section 1952.0545 that excludes such individuals, by: |
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| 67 | 67 | | (A) a licensed resident relative; and |
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| 68 | 68 | | (B) any other licensed operator using the vehicle |
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| 69 | 69 | | with the express or implied permission of the insured. |
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| 70 | 70 | | SECTION 2. The change in law made by this Act applies only |
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| 71 | 71 | | to an insurance policy delivered, issued for delivery, or renewed |
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| 72 | 72 | | on or after January 1, 2020. An insurance policy delivered, issued |
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| 73 | 73 | | for delivery, or renewed before January 1, 2020, is governed by the |
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| 74 | 74 | | law in effect immediately before the effective date of this Act, and |
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| 75 | 75 | | that law is continued in effect for that purpose. |
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| 76 | 76 | | SECTION 3. This Act takes effect September 1, 2019. |
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