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By: Castro, Gallego H.B. No. 1662
Substitute the following for H.B. No. 1662:
By: Gallego C.S.H.B. No. 1662
A BILL TO BE ENTITLED
AN ACT
relating to requiring certain coverage under motor vehicle
liability insurance policies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 5, Insurance Code, is
amended by adding Article 5.07-2 to read as follows:
Art. 5.07-2. COVERAGE FOR COST OF CERTAIN RENTAL VEHICLES
Sec. 1. DEFINITIONS. In this article:
(1) "Insurer" means an insurance company, reciprocal
or interinsurance exchange, mutual, capital stock company, county
mutual, association, Lloyd's plan, or other entity writing motor
vehicle insurance in this state. The term includes a company
affiliated with an insurer.
(2) "Third-party claimant" means any person who makes
a property damage claim on a motor vehicle liability insurance
policy who is not the policyholder of the motor vehicle liability
insurance on which the claim is made.
Sec. 2. COVERAGE REQUIRED. (a) An insurer that delivers or
issues for delivery a liability insurance policy on a motor vehicle
shall indemnify a third-party claimant who requests a substitute
motor vehicle comparable to the third-party claimant's damaged
motor vehicle for reasonable rental costs for the requested
substitute motor vehicle if the third-party claimant's motor
vehicle sustains damage for which the third-party claimant may
recover under the policy and is, as a result of the damage
sustained:
(1) inoperable;
(2) unsafe to drive; or
(3) out of service for repairs.
(b) In processing a third-party motor vehicle insurance
claim for which an insured may be liable to a third-party claimant,
an insurer shall pay for rental costs incurred by the third-party
claimant beginning on the date on which the motor vehicle is unable
to be used because of a condition described by Section 2(a) of this
article and ending on the date on which the insurer could reasonably
expect the third-party claimant's motor vehicle to be fully
repaired and operable.
(c) On receipt of a claim from a third party, an insurer
shall notify the third-party claimant in writing that, on request,
the insurer will indemnify the third-party claimant for reasonable
rental costs for a substitute motor vehicle comparable to the
third-party claimant's damaged motor vehicle as required by this
section. The notice must state that the insurer's indemnification
of the third-party claimant may be reduced by a percentage equal to
the third-party claimant's percentage of responsibility for the
damage sustained to the third-party claimant's motor vehicle.
Sec. 3. PROPORTIONATE INDEMNIFICATION. An insurer may
indemnify a third-party claimant for:
(1) the entire cost of a substitute motor vehicle
requested under Subsection (a); or
(2) that percentage of the cost of a substitute motor
vehicle requested under Subsection (a) that is equal to the
insured's percentage of responsibility for the damage sustained to
the third-party claimant's motor vehicle.
SECTION 2. This Act takes effect September 1, 2003, and
applies only to a motor vehicle liability insurance policy that is
delivered, issued for delivery, or renewed after January 1, 2004. A
motor vehicle liability insurance policy that is delivered, issued
for delivery, or renewed before January 1, 2004, is governed by the
law as it existed immediately before the effective date of this Act,
and the former law is continued in effect for that purpose.