CHAPTER 1952. POLICY PROVISIONS AND FORMS FOR AUTOMOBILE INSURANCE
INSURANCE CODE
TITLE 10. PROPERTY AND CASUALTY INSURANCE
SUBTITLE C. AUTOMOBILE INSURANCE
CHAPTER 1952. POLICY PROVISIONS AND FORMS FOR
AUTOMOBILE INSURANCE
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 1952.001. APPLICABILITY OF CHAPTER. Except as provided by
Section 1952.201, this chapter applies to an insurer writing
automobile insurance in this state, including an insurance
company, corporation, reciprocal or interinsurance exchange,
mutual insurance company, association, Lloyd's plan, or other
insurer.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER B. POLICY FORMS AND PROVISIONS IN GENERAL
Sec. 1952.051. POLICY FORMS FOR AUTOMOBILE INSURANCE.
Notwithstanding Subsections (1)-(4) and (7), Article 5.06, policy
forms and endorsements for automobile insurance in this state are
regulated under Chapter 2301 and Article 5.13-2.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.052. USE OF PREVIOUSLY APPROVED OR ADOPTED POLICY
FORMS AUTHORIZED. An insurer may continue to use a policy form
or endorsement approved or adopted by the commissioner under
Article 5.06 before June 11, 2003, on notification in writing to
the commissioner that the insurer will continue to use the policy
form or endorsement.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.053. WITHDRAWAL OF APPROVAL. The commissioner may,
after notice and hearing, withdraw the commissioner's approval of
a policy or endorsement form that was approved by the
commissioner under Article 5.06.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.054. REQUIRED DISCLOSURES REGARDING SHORT-TERM
POLICIES. (a) An insurance policy or other document evidencing
proof of purchase of a personal automobile insurance policy
written for a term of less than 30 days may not be used to obtain
an original or renewal driver's license, an automobile
registration or license plates, or a motor vehicle inspection
certificate. An insurance policy or other document described by
this subsection must contain the following statement:
TEXAS LAW PROHIBITS USE OF THIS DOCUMENT TO OBTAIN A MOTOR
VEHICLE INSPECTION CERTIFICATE, AN ORIGINAL OR RENEWAL DRIVER'S
LICENSE, OR AN AUTOMOBILE REGISTRATION OR LICENSE PLATES.
(b) Before accepting any premium or fee for a personal
automobile insurance policy or binder for a term of less than 30
days, an agent or insurer must make the following written
disclosure to the applicant or insured:
TEXAS LAW PROHIBITS USE OF THIS POLICY OR BINDER TO OBTAIN A
MOTOR VEHICLE INSPECTION CERTIFICATE, AN ORIGINAL OR RENEWAL
DRIVER'S LICENSE, OR AN AUTOMOBILE REGISTRATION OR LICENSE
PLATES.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.055. CERTIFICATE OF INSURANCE AS SUBSTITUTE FOR
INSURANCE POLICY. (a) An insurer that complies with applicable
requirements may issue and deliver a certificate of insurance as
a substitute for issuing and delivering an insurance policy
adopted or approved by the commissioner. The certificate must:
(1) be in the form prescribed by the commissioner; and
(2) refer to and identify the policy form for which the
certificate is substituted.
(b) A certificate under this section represents the insurance
policy and, when issued, is evidence that the certificate holder
is insured under the identified policy form. The certificate is
subject to the same limitations, conditions, coverages, selection
of options, and other provisions provided in the policy, and the
certificate must show and adequately reference that policy
information. The certificate or subsequent attachments to the
certificate must refer to all endorsements to the policy.
(c) A certificate under this section must be executed in the
same manner as though an insurance policy were issued. If an
insurer substitutes a certificate for a policy, the insurer shall
simultaneously provide the insured receiving the certificate with
an outline of coverages in the form and content approved by the
commissioner. At the insured's request, the insurer shall
provide the insured with a copy of the policy.
(d) The commissioner may adopt rules necessary to implement this
section, including a rule limiting the application of this
section to private passenger automobile insurance policies.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.056. REQUIRED PROVISION: COVERAGE FOR CERTAIN SPOUSES.
A personal automobile insurance policy or any similar policy
form adopted or approved by the commissioner under Article 5.06
or filed under Subchapter B, Chapter 2301, that covers liability
arising out of ownership, maintenance, or use of a motor vehicle
of a spouse who is otherwise insured by the policy must contain a
provision to continue coverage for the spouse during a period of
separation in contemplation of divorce.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.057. PROHIBITED PROVISION: PAYMENT ON CONVICTION FOR
DRUG OFFENSE. (a) An insurer may not deliver or issue for
delivery in this state an automobile insurance policy that
provides payment on final conviction of the named insured for
loss for a covered motor vehicle seized by federal or state law
enforcement officers as evidence in a case against the named
insured under Chapter 481, Health and Safety Code, or under the
federal Controlled Substances Act (21 U.S.C. Section 801 et
seq.).
(b) For purposes of this section, a named insured for:
(1) an individual automobile insurance policy is the person
named on the declaration page of the policy and the person's
spouse; and
(2) an automobile insurance policy other than an individual
policy is the company or corporation named on the declaration
page of the policy and any officer, director, or shareholder of
that company or corporation.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.058. LOSS CONTROL INFORMATION AND SERVICES REQUIRED.
(a) An insurer must provide loss control information as a
prerequisite to writing commercial automobile liability insurance
in this state.
(b) The insurer shall provide to the insurer's policyholders
loss control information reasonably commensurate with the risks,
exposures, and experience of the insured's business. To provide
loss control information or services, the insurer may:
(1) employ qualified personnel;
(2) retain qualified independent contractors;
(3) contract with the policyholder to provide qualified loss
control personnel and services; or
(4) use a combination of methods described by this subsection.
(c) If there is evidence that an insurer is not providing
reasonable loss control information or is not using that
information in a reasonable manner to reduce losses, the
commissioner shall order a hearing to determine whether the
insurer is in compliance with this section. If the commissioner
determines that the insurer is not in compliance, the
commissioner may impose any sanction authorized by Chapter 82.
(d) An insurer or an agent or employee of the insurer is not
liable, and a cause of action does not arise against the insurer,
agent, or employee, for any accident based on the allegation that
the accident was caused or could have been prevented by a
program, information, inspection, or other activity or service
undertaken by the insurer for the prevention of accidents in
connection with operations of the insured. The immunity provided
by this subsection does not affect the liability of an insurer
for compensation or as otherwise provided in an insurance policy.
(e) Loss control information an insurer provides to an insured
under this section is not subject to discovery and is not
admissible as evidence in any civil proceeding.
(f) The commissioner, after holding a public hearing on the
proposed rules, may adopt reasonable rules for the enforcement of
this section.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER C. UNINSURED OR UNDERINSURED MOTORIST COVERAGE
Sec. 1952.101. UNINSURED OR UNDERINSURED MOTORIST COVERAGE
REQUIRED. (a) In this section, "uninsured or underinsured
motorist coverage" means the provisions of an automobile
liability insurance policy that provide for coverage in at least
the limits prescribed by Chapter 601, Transportation Code, that
protects insureds who are legally entitled to recover from owners
or operators of uninsured or underinsured motor vehicles damages
for bodily injury, sickness, disease, or death, or property
damage resulting from the ownership, maintenance, or use of any
motor vehicle.
(b) An insurer may not deliver or issue for delivery in this
state an automobile liability insurance policy, including a
policy provided through the Texas Automobile Insurance Plan
Association under Chapter 2151, that covers liability arising out
of the ownership, maintenance, or use of any motor vehicle unless
the insurer provides uninsured or underinsured motorist coverage
in the policy or supplemental to the policy.
(c) The coverage required by this subchapter does not apply if
any insured named in the insurance policy rejects the coverage in
writing. Unless the named insured requests in writing the
coverage required by this subchapter, the insurer is not required
to provide that coverage in or supplemental to a reinstated
insurance policy or renewal insurance policy if the named insured
rejected the coverage in connection with that insurance policy or
an insurance policy previously issued to the insured by the same
insurer or by an affiliated insurer.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.037(a), eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.037(a), eff. September 1, 2007.
Sec. 1952.102. UNINSURED MOTOR VEHICLE. (a) For purposes of
the coverage required by this subchapter, "uninsured motor
vehicle," subject to the terms of the coverage, is considered to
include an insured motor vehicle as to which the insurer
providing liability insurance is unable because of insolvency to
make payment with respect to the legal liability of the insured
within the limits specified in the insurance.
(b) The commissioner may, in the policy forms filed under
Subchapter B, Chapter 2301, allow "uninsured motor vehicle" to be
defined or, in policy forms adopted under Article 5.06, define
"uninsured motor vehicle," to exclude certain motor vehicles
whose operators are in fact uninsured.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.103. UNDERINSURED MOTOR VEHICLE. For purposes of the
coverage required by this subchapter, "underinsured motor
vehicle" means an insured motor vehicle on which there is
collectible liability insurance coverage with limits of liability
for the owner or operator that were originally lower than, or
have been reduced by payment of claims arising from the same
accident to, an amount less than the limit of liability stated in
the underinsured coverage of the insured's policy.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.104. REQUIRED PROVISIONS RELATING TO UNINSURED OR
UNDERINSURED MOTORIST COVERAGE. The portion of a policy form
adopted under Article 5.06 or filed as provided by Subchapter B,
Chapter 2301, to provide coverage under this subchapter must:
(1) provide that, regardless of the number of persons insured,
policies or bonds applicable, vehicles involved, or claims made,
the total aggregate limit of liability to any one person who
sustains bodily injury or property damage as the result of a
single occurrence may not exceed the limit of liability for those
coverages as stated in the insurance policy and that the total
aggregate limit of liability to all claimants, if more than one,
may not exceed the total limit of liability per occurrence as
stated in the policy;
(2) provide for the exclusion of the recovery of damages for
bodily injury or property damage, or both, resulting from the
intentional acts of the insured; and
(3) require that, for the insured to recover under the uninsured
motorist coverage if the owner or operator of any motor vehicle
that causes bodily injury or property damage to the insured is
unknown, actual physical contact must have occurred between the
motor vehicle owned or operated by the unknown person and the
person or property of the insured.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.105. LIABILITY LIMITS. (a) The limits of liability
for bodily injury, sickness, disease, or death must be offered to
an insured in the amounts desired by the insured, but not in
amounts greater than the limits of liability specified in the
bodily injury liability provisions of the insured's policy.
(b) Subject to a deductible amount of $250, coverage for
property damage must be offered to an insured in the amounts
desired by the insured, but not in amounts greater than the
limits of liability specified in the property damage liability
provisions of the insured's policy.
(c) Notwithstanding Subsections (a) and (b), amounts of
liability limits for bodily injury, sickness, disease, or death
and amounts for coverage for property damage may not be offered
in amounts less than those prescribed by Chapter 601,
Transportation Code.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.106. RECOVERY UNDER UNDERINSURED MOTORIST COVERAGE.
Underinsured motorist coverage must provide for payment to the
insured of all amounts that the insured is legally entitled to
recover as damages from owners or operators of underinsured motor
vehicles because of bodily injury or property damage, not to
exceed the limit specified in the insurance policy, and reduced
by the amount recovered or recoverable from the insurer of the
underinsured motor vehicle.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.107. RECOVERY UNDER COLLISION OR COMBINED COVERAGE.
(a) An insured who has collision coverage and uninsured or
underinsured property damage liability coverage may recover under
the coverage the insured chooses.
(b) If neither the collision coverage or the uninsured or
underinsured property damage liability coverage is sufficient
alone to cover all damage resulting from a single occurrence, the
insured may recover under both coverages. If recovering under
both coverages, the insured shall designate one coverage as the
primary coverage and pay the deductible applicable to that
coverage. The primary coverage must be exhausted before any
recovery is made under the secondary coverage.
(c) If both the primary and secondary coverages are used to pay
damages from a single occurrence, the insured may not be required
to pay the deductible applicable to the secondary coverage when
the amount of the deductible otherwise applicable to the
secondary coverage is the same as or less than the amount of the
deductible applicable to the primary coverage. If both coverages
are used to pay damages from a single occurrence and the amount
of the deductible otherwise applicable to the secondary coverage
is greater than the amount of the deductible applicable to the
primary coverage, the insured shall pay the difference between
the amount of the two deductibles with respect to the secondary
coverage.
(d) The insured may not recover under both the primary and
secondary coverages more than the actual damages suffered.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.108. INSURER'S RIGHT OF RECOVERY. (a) An insurer
that makes a payment to any person under any coverage required by
this subchapter is subject to the terms of that coverage and, to
the extent of the payment, is entitled to the proceeds of any
settlement or judgment resulting from the exercise of any right
of recovery of the person to whom the payment is made against any
person or organization legally responsible for the bodily injury,
sickness, disease, or death for which the payment is made,
including the proceeds recoverable from the assets of an
insolvent insurer.
(b) If, under an insurance policy issued under this subchapter,
an insurer makes a payment as a result of the insolvency of
another insurer:
(1) the insolvent insurer's insured shall be given credit to the
extent of the paying insurer's payment in any judgment obtained
against the insured with respect to the insured's legal liability
for damages described by Subsection (a); and
(2) subject to Subchapter F, Chapter 462, the paying insurer has
the right to proceed directly against the insolvent insurer or
that insurer's receiver, and in pursuing that right the paying
insurer has any rights that the insolvent insurer's insured might
otherwise have had if the insured had made the payment.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.109. BURDEN OF PROOF IN DISPUTE. The insurer has the
burden of proof in a dispute as to whether a motor vehicle is
uninsured.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.110. VENUE. Notwithstanding Section 15.032, Civil
Practice and Remedies Code, an action against an insurer in
relation to the coverage provided under this subchapter,
including an action to enforce that coverage, may be brought only
in the county in which:
(1) the policyholder or beneficiary instituting the action
resided at the time of the accident involving the uninsured or
underinsured motor vehicle; or
(2) the accident occurred.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER D. PERSONAL INJURY PROTECTION COVERAGE
Sec. 1952.151. PERSONAL INJURY PROTECTION. "Personal injury
protection" consists of provisions of an automobile liability
insurance policy that provide for payment to the named insured in
the policy, members of the insured's household, and any
authorized operator or passenger of the named insured's motor
vehicle, including a guest occupant, of all reasonable expenses
that:
(1) arise from an accident;
(2) are incurred not later than the third anniversary of the
date of the accident; and
(3) are for:
(A) necessary medical, surgical, x-ray, or dental services,
including prosthetic devices, and necessary ambulance, hospital,
professional nursing, or funeral services;
(B) in the case of an income producer, replacement of income
lost as the result of the accident; or
(C) in the case of a person injured in the accident who was not
an income or wage producer at the time of the accident,
reimbursement of necessary and reasonable expenses incurred for
essential services ordinarily performed by the injured person for
care and maintenance of the family or family household.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.152. PERSONAL INJURY PROTECTION COVERAGE REQUIRED.
(a) An insurer may not deliver or issue for delivery in this
state an automobile liability insurance policy, including a
policy provided through the Texas Automobile Insurance Plan
Association under Chapter 2151, that covers liability arising out
of the ownership, maintenance, or use of any motor vehicle unless
the insurer provides personal injury protection coverage in the
policy or supplemental to the policy.
(b) The coverage required by this subchapter does not apply if
any insured named in the insurance policy rejects the coverage in
writing. Unless the named insured requests in writing the
coverage required by this subchapter, the insurer is not required
to provide that coverage in or supplemental to a reinstated
insurance policy or renewal insurance policy if the named insured
rejected the coverage in connection with that insurance policy or
an insurance policy previously issued to the insured by the same
insurer or by an affiliated insurer.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.038(a), eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.038(a), eff. September 1, 2007.
Sec. 1952.153. MAXIMUM REQUIRED AMOUNT OF PERSONAL INJURY
PROTECTION. This subchapter does not require an insurer to
provide personal injury protection coverage in an amount that
exceeds $2,500 for all benefits, in the aggregate, for each
person.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.154. LOSS OF INCOME BENEFITS. An insurer providing
loss of income benefits under coverage required by this
subchapter may require that the insured, as a condition of
receiving those benefits, provide the insurer with reasonable
medical proof of the insured's injury causing loss of income.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.155. BENEFITS PAYABLE WITHOUT REGARD TO FAULT OR
COLLATERAL SOURCE; EFFECT ON SUBROGATION. (a) The benefits
under coverage required by this subchapter are payable without
regard to:
(1) the fault or nonfault of the named insured or recipient in
causing or contributing to the accident; and
(2) any collateral source of medical, hospital, or wage
continuation benefits.
(b) Except as provided by Subsection (c), an insurer paying
benefits under coverage required by this subchapter does not have
a right of subrogation or claim against any other person or
insurer to recover any benefits by reason of the alleged fault of
the other person in causing or contributing to the accident.
(c) An insurer paying benefits pursuant to this subchapter,
including a county mutual insurance company, shall have a right
of subrogation and a claim against a person causing or
contributing to the accident if, on the date of loss, financial
responsibility as required by Chapter 601, Transportation Code,
has not been established for a motor vehicle involved in the
accident and operated by that person.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
730, Sec. 3B.039(a), eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch.
921, Sec. 9.039(a), eff. September 1, 2007.
Sec. 1952.156. PAYMENT OF BENEFITS. (a) Subject to the
requirements of this section and Section 1952.157, an insurer
shall pay benefits under the coverage required by this subchapter
periodically as claims for those benefits arise, but not later
than the 30th day after the date the insurer receives
satisfactory proof of a claim.
(b) The coverage required by this subchapter may:
(1) prescribe a period of not less than six months after the
date of an accident within which the original proof of loss with
respect to a claim for benefits must be presented to the insurer;
and
(2) provide that an insurer may require reasonable medical proof
of an alleged recurrence of an injury for which an original claim
for benefits was made if a lapse occurs in the period of total
disability or in the medical treatment of an injured person who:
(A) has received benefits under that coverage; and
(B) subsequently claims additional benefits based on the alleged
recurrence.
(c) The aggregate benefits payable under the coverage required
by this subchapter to any person may not exceed the maximum
limits prescribed in the insurance policy.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.157. ACTION FOR FAILURE TO PAY BENEFITS. (a) If the
insurer fails to pay benefits under the coverage required by this
subchapter when due, the person entitled to those benefits may
bring an action in contract to recover the benefits.
(b) If the insurer is required to pay benefits described by
Subsection (a), the person entitled to the benefits is entitled
to recover reasonable attorney's fees, a penalty of 12 percent,
and interest at the legal rate from the date those amounts became
overdue.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.158. EXCLUSION OF BENEFITS. An insurer shall exclude
benefits to an insured or the insured's personal representative
under the coverage required by this subchapter if the insured's
conduct contributed to the injury the insured sustained and that
conduct:
(1) involved intentionally causing injury to the insured; or
(2) occurred while committing a felony or while seeking to elude
lawful apprehension or arrest by a law enforcement official.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.159. OFFSET AGAINST LIABILITY CLAIM. (a) If a
liability claim is made by a guest or passenger described by
Section 1952.151 against the owner or operator of the motor
vehicle in which the guest or passenger was riding or against the
owner's or operator's liability insurer, the owner or operator of
the motor vehicle or the owner's or operator's liability insurer
is entitled to an offset, credit, or deduction against any award
made to the guest or passenger in an amount equal to the amounts
paid by the owner, the operator, or the owner's or operator's
automobile liability insurer to the guest or passenger under
personal injury protection.
(b) This subchapter does not authorize a direct action against a
liability insurer if that right does not presently exist at law.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.160. INAPPLICABILITY TO ACCIDENT OR HEALTH INSURANCE.
This subchapter applies only to an automobile insurance policy
subject to this subtitle or Subchapter A, Chapter 5, and does not
apply to any other accident or health insurance policy,
regardless of whether the accident or health insurance policy
provides indemnity against automobile-connected injuries.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.161. CERTAIN COVERAGE UNAFFECTED. This subchapter
does not:
(1) affect the offering of medical payments coverage, disability
benefits, or accidental death benefits, as presently prescribed
by the commissioner; or
(2) prevent an insurer from providing benefits broader than the
minimum benefits described by this subchapter, subject to the
rules prescribed by the commissioner.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER E. SHORT-TERM LIABILITY INSURANCE FOR
CERTAIN MOTORISTS
Sec. 1952.201. APPLICABILITY OF SUBCHAPTER. This subchapter
applies to an insurer authorized to write automobile insurance in
this state, including an insurance company, reciprocal or
interinsurance exchange, mutual insurance company, capital stock
company, county mutual insurance company, Lloyd's plan, or other
entity.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.202. DEFINITIONS. In this subchapter:
(1) "Motor vehicle" means any private passenger vehicle or
utility type vehicle that has a gross weight of not more than
25,000 pounds.
(2) "Short-term liability insurance policy" means an insurance
policy that:
(A) provides coverage for at least 24 hours but not for more
than one week;
(B) meets the requirements of Chapter 601, Transportation Code;
(C) covers liability for bodily injury, death, and property
damage arising from the use or operation of a motor vehicle; and
(D) is not insurance assigned to an authorized insurer by the
Texas Automobile Insurance Plan Association under Section
2151.102(a).
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.203. SHORT-TERM LIABILITY INSURANCE PROGRAM. (a) The
commissioner by rule may establish a program to provide for the
sale of short-term liability insurance policies to nonresident
motorists who are visiting this state.
(b) The commissioner may negotiate an agreement with any insurer
under which the insurer will sell insurance policies described by
this section.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.204. AGENT LICENSE REQUIRED. A person representing an
insurer in selling short-term liability insurance policies under
this subchapter must be licensed under Title 13.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.205. SALE OF SHORT-TERM LIABILITY INSURANCE POLICIES.
An insurer selling short-term liability insurance policies under
this subchapter shall use policy forms adopted by the
commissioner under Article 5.06 or filed and in effect as
provided by Subchapter B, Chapter 2301, as applicable, unless the
insurer is exempt from using those forms.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER F. GARAGE INSURANCE
Sec. 1952.251. DEFINITIONS. In this subchapter:
(1) "Garage customer" means a person or organization other than:
(A) the named insured under a garage insurance policy;
(B) an employee, director, officer, shareholder, partner, or
agent of the named insured; or
(C) a resident of the same household as:
(i) the named insured; or
(ii) an employee, director, officer, shareholder, partner, or
agent of the named insured.
(2) "Garage insurance" means automobile insurance as defined by
Article 5.01 issued to a named insured who is engaged in the
business of selling, servicing, or repairing motor vehicles as
defined by commissioner rule or order.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.252. GARAGE INSURANCE. (a) A garage insurance policy
may provide that a garage customer is not an insured under the
policy and that the coverage under the policy does not apply to a
garage customer except to the extent that any other insurance
coverage that is collectible and available to the garage customer
is not equal to the minimum financial responsibility limits
specified by Chapter 601, Transportation Code.
(b) Notwithstanding any provision to the contrary in another
insurance policy as to whether the insurance coverage described
by Subsection (a) that is provided under that policy is primary,
excess, or contingent insurance, or otherwise, the other
insurance coverage is the primary insurance as to the garage
customer.
(c) A garage insurance policy containing a provision described
by Subsection (a) may not cover a garage customer except to the
extent permitted by this section, notwithstanding the terms of
the other insurance policy providing coverage described by
Subsection (a).
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
SUBCHAPTER G. REPAIR OF MOTOR VEHICLES
Sec. 1952.301. LIMITATION ON PARTS, PRODUCTS, OR REPAIR PERSONS
OR FACILITIES PROHIBITED. (a) Except as provided by rules
adopted by the commissioner, under an automobile insurance policy
that is delivered, issued for delivery, or renewed in this state,
an insurer may not directly or indirectly limit the insurer's
coverage under a policy covering damage to a motor vehicle by:
(1) specifying the brand, type, kind, age, vendor, supplier, or
condition of parts or products that may be used to repair the
vehicle; or
(2) limiting the beneficiary of the policy from selecting a
repair person or facility to repair damage to the vehicle.
(b) In settling a liability claim by a third party against an
insured for property damage claimed by the third party, an
insurer may not require the third-party claimant to have repairs
made by a particular repair person or facility or to use a
particular brand, type, kind, age, vendor, supplier, or condition
of parts or products.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.302. PROHIBITED ACTS IN CONNECTION WITH REPAIR OF
MOTOR VEHICLE. In connection with the repair of damage to a
motor vehicle covered under an automobile insurance policy, an
insurer, an employee or agent of an insurer, an insurance
adjuster, or an entity that employs an insurance adjuster may
not:
(1) solicit or accept a referral fee or gratuity in exchange for
referring a beneficiary or third-party claimant to a repair
person or facility to repair the damage;
(2) state or suggest, either orally or in writing, to a
beneficiary that the beneficiary must use a specific repair
person or facility or a repair person or facility identified on a
preferred list compiled by an insurer for the damage repair or
parts replacement to be covered by the policy; or
(3) restrict the right of a beneficiary or third-party claimant
to choose a repair person or facility by requiring the
beneficiary or third-party claimant to travel an unreasonable
distance to repair the damage.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.303. CONTRACTS BETWEEN INSURER AND REPAIR PERSON OR
FACILITY. (a) A contract between an insurer and a repair person
or facility, including an agreement under which the repair person
or facility agrees to extend discounts for parts or labor to the
insurer in exchange for referrals by the insurer, may not result
in a reduction of coverage under an insured's automobile
insurance policy.
(b) The commissioner may adopt rules under Chapter 542 with
respect to any fraudulent activity of any party to an agreement
described by Subsection (a).
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.304. PROVISION OF INFORMATION REGARDING REPAIRS. An
insurer may not prohibit a repair person or facility from
providing a beneficiary or third-party claimant with information
that states:
(1) the description, manufacturer, or source of the parts used;
and
(2) the amounts charged to the insurer for the parts and related
labor.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.305. NOTICE OF RIGHTS REGARDING REPAIR OF MOTOR
VEHICLE. (a) At the time a motor vehicle is presented to an
insurer, an insurance adjuster, or other person in connection
with a claim for damage repair, the insurer, insurance adjuster,
or other person shall provide to the beneficiary or third-party
claimant notice of the provisions of this subchapter.
(b) The commissioner shall adopt a rule establishing the method
or methods insurers must use to comply with the notice provisions
of this section.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.306. COMPLAINTS. A beneficiary, third-party claimant,
or repair person or facility may submit a written, documented
complaint to the department with respect to an alleged violation
of this subchapter.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.
Sec. 1952.307. RULES. Rules adopted by the commissioner to
implement this subchapter must include requirements that:
(1) any limitation described by Section 1952.301(a) be clearly
and prominently displayed on the face of the insurance policy or
certificate in lieu of an insurance policy; and
(2) the insured give written consent to a limitation described
by Section 1952.301(a) after the insured is notified orally and
in writing of the limitation at the time the insurance policy is
purchased.
Added by Acts 2005, 79th Leg., Ch.
727, Sec. 2, eff. April 1, 2007.