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