By Smithee H.B. No. 2753
76R8880 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to insurance coverage on certain rental vehicles and
1-3 vehicle equipment.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subsections (b), (f), (g), (i), and (j), Section
1-6 21, Article 21.07, Insurance Code, as added by Chapter 820, Acts of
1-7 the 75th Legislature, 1997, are amended to read as follows;
1-8 (b) As used in this section:
1-9 (1) "Limited licensee" means a person authorized to
1-10 sell certain insurance coverages relating to the rental of [motor]
1-11 vehicles or vehicle equipment pursuant to the provisions of this
1-12 section.
1-13 (2) "Rental agreement" means any written agreement
1-14 setting forth the terms and conditions governing the use of a
1-15 vehicle or vehicle equipment provided by the rental car company.
1-16 (3) "Rental car company" means any person in the
1-17 business of providing leased or rented vehicles or vehicle
1-18 equipment to the public.
1-19 (4) "Renter" means any person obtaining the use of a
1-20 vehicle or vehicle equipment from a rental car company under the
1-21 terms of a rental agreement.
1-22 (5) "Vehicle" means:
1-23 (A) a motor vehicle of the private passenger
1-24 type including passenger vans and minivans that are primarily
2-1 intended for the transport of persons;
2-2 (B) a motor home;
2-3 (C) a motorcycle:
2-4 (D) a trailer with a gross vehicle weight rating
2-5 of 10,000 pounds or less; or
2-6 (E) a truck with a gross vehicle weight rating
2-7 of 26,000 pounds or less, the operation of which does not require a
2-8 commercial driver's license.
2-9 (6) "Vehicle equipment" means a cartop carrier, tow
2-10 bar, or tow dolly specifically designed for use with a vehicle.
2-11 (f) The rental car company, agent, licensee, or franchisee
2-12 licensed pursuant to Subsection (c) of this section may act as
2-13 agent for an authorized insurer only in connection with the rental
2-14 of vehicles or vehicle equipment and only with respect to the
2-15 following kinds of insurance:
2-16 (1) excess liability insurance that provides coverage
2-17 to the rental car company or franchisee and renters and other
2-18 authorized drivers of rental vehicles, in excess of the standard
2-19 liability limit provided by the rental car company in its rental
2-20 agreement, for liability arising from the negligent operation of
2-21 the rental vehicle or vehicle equipment;
2-22 (2) accident and health insurance that provides
2-23 coverage to renters and other vehicle occupants for accidental
2-24 death or dismemberment and for medical expenses resulting from an
2-25 accident involving the rental vehicle or vehicle equipment that
2-26 occurs during the rental period;
2-27 (3) personal effects insurance that provides coverage
3-1 to renters and other rental vehicle occupants for the loss of, or
3-2 damage to, personal effects or household belongings that occurs
3-3 during the rental period; or
3-4 (4) any other coverage that the Commissioner may
3-5 approve as meaningful and appropriate in connection with the rental
3-6 of vehicles or vehicle equipment.
3-7 (g) No insurance may be issued pursuant to this section
3-8 unless:
3-9 (1) the rental period of the rental agreement does not
3-10 exceed 30 consecutive days; and
3-11 (2) at every rental car location where rental [car]
3-12 agreements are executed, brochures or other written materials are
3-13 prominently displayed and readily available to the prospective
3-14 renter that;
3-15 (A) summarize, clearly and correctly, the
3-16 material terms of insurance coverage, including the identity of the
3-17 insurer, offered to renters;
3-18 (B) disclose that these policies offered by the
3-19 rental car company may provide a duplication of coverage already
3-20 provided by a renter's personal automobile insurance policy,
3-21 homeowner's insurance policy, personal liability insurance policy,
3-22 or other source of coverage;
3-23 (C) state that the purchase by the renter of the
3-24 kinds of insurance specified in this section is not required in
3-25 order to rent a vehicle or vehicle equipment;
3-26 (D) describe the process for filing a claim in
3-27 the event the renter elects to purchase coverage and in the event
4-1 of a claim; and
4-2 (E) contain any additional information on the
4-3 price, benefits, exclusions, conditions, or other limitations of
4-4 such policies as the Commissioner may by regulation prescribe; and
4-5 (3) evidence of coverage is provided to every renter
4-6 who elects to purchase such coverage.
4-7 (i) Each rental car company or franchisee licensed pursuant
4-8 to this section shall conduct a training program which shall be
4-9 submitted to the Commissioner for approval prior to use and which
4-10 shall meet the following minimum standards:
4-11 (1) each trainee shall receive basic instruction about
4-12 the kinds of insurance specified in this section offered for
4-13 purchase by prospective renters of rental vehicles or vehicle
4-14 equipment;
4-15 (2) each trainee shall be instructed to acknowledge to
4-16 a prospective renter of a rental vehicle or vehicle equipment that
4-17 purchase of any such insurance specified in this section is not
4-18 required in order for the renter to rent a vehicle or vehicle
4-19 equipment; and
4-20 (3) each trainee shall be instructed to acknowledge to
4-21 a prospective renter of a rental vehicle or vehicle equipment that
4-22 the renter may have insurance policies that already provide the
4-23 coverage being offered by the rental car company pursuant to this
4-24 section.
4-25 (j) Limited licensees acting pursuant to and under the
4-26 authority of this section shall comply with all applicable
4-27 provisions of this Article, except that notwithstanding any other
5-1 provision of this Article, or any rule adopted by the Commissioner,
5-2 a limited licensee pursuant to this section shall not be required
5-3 to treat premiums collected from renters purchasing such insurance
5-4 when renting vehicles or vehicle equipment as funds received in a
5-5 fiduciary capacity, provided that:
5-6 (1) the insurer represented by the limited licensee
5-7 has consented in writing, signed by the insurer's officer, that
5-8 premiums need not be segregated from funds received by the rental
5-9 car company on account of vehicle or vehicle equipment rental; and
5-10 (2) the charges for insurance coverage are itemized
5-11 but not billed to the renter separately from the charges for rental
5-12 vehicles or vehicle equipment.
5-13 SECTION 2. The change in law made by this Act to Section 21,
5-14 Article 21.07, Insurance Code, as added by Chapter 820, Acts of the
5-15 75th Legislature, 1997, does not affect the validity of a license
5-16 issued under that section on or before the effective date of this
5-17 Act.
5-18 SECTION 3. This Act takes effect September 1, 1999, and
5-19 applies to an insurance policy that is delivered, issued for
5-20 delivery, or renewed on or after September 1, 1999. A policy
5-21 delivered, issued for delivery, or renewed before September 1,
5-22 1999, is governed by the law as it existed immediately before the
5-23 effective date of this Act, and that law is continued in effect for
5-24 that purpose.
5-25 SECTION 4. The importance of this legislation and the
5-26 crowded condition of the calendars in both houses create an
5-27 emergency and an imperative public necessity that the
6-1 constitutional rule requiring bills to be read on three several
6-2 days in each house be suspended, and this rule is hereby suspended.