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A BILL TO BE ENTITLED
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AN ACT
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relating to continuation of automobile insurance coverage for |
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temporary substitute vehicles during a personal automobile |
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insurance policy term. |
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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. REQUIRED PROVISION: LIABILITY COVERAGE FOR |
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TEMPORARY SUBSTITUTE VEHICLES DURING POLICY TERM. (a) This |
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section applies to an insurer authorized to write automobile |
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insurance in this state, including an insurance company, reciprocal |
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or interinsurance exchange, mutual insurance company, capital |
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stock company, county mutual insurance company, Lloyd's plan, or |
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other entity. |
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(b) In this section: |
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(1) "Repair facility" means a person that engages in |
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the business of servicing, repairing, or replacing a motor vehicle |
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for consideration or in accordance with a warranty, service |
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contract, or maintenance contract. |
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(2) "Resident relative" means an individual who: |
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(A) resides in the same household as the insured; |
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and |
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(B) is related to the insured within the third |
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degree by consanguinity or affinity, as determined under Chapter |
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573, Government Code. |
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(3) "Temporary substitute vehicle" means a motor |
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vehicle that is: |
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(A) loaned or provided without charge by a repair |
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facility to the insured while a vehicle owned by the insured is |
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being serviced, repaired, or replaced, including a vehicle loaned |
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or provided following the theft of a vehicle owned by the insured; |
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and |
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(B) not owned by the insured, a resident |
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relative, or any individual who resides in the same household as the |
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insured. |
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(c) A personal automobile insurance policy must contain a |
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provision to provide primary liability coverage in accordance with |
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this section for a temporary substitute vehicle during the policy |
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term. |
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(d) Coverage under this section is required only for a |
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vehicle that is: |
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(1) a private passenger automobile; or |
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(2) a pickup, utility vehicle, or van with a gross |
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vehicle weight of 25,000 pounds or less that is not used for the |
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delivery or transportation of goods, materials, or supplies, other |
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than samples, unless: |
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(A) the delivery of the goods, materials, or |
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supplies is not the primary use for which the vehicle is employed; |
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or |
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(B) the vehicle is used for farming or ranching. |
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(e) Coverage under this section must provide primary, not |
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excess, coverage subject to the same financial and territorial |
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limits of the policy, including coverage against damage to a |
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temporary substitute vehicle and against property damage and bodily |
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injury claimed by a third party. |
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(f) Coverage under this section must insure against loss |
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from liability for damages arising out of the use of a temporary |
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substitute vehicle: |
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(1) by the insured; and |
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(2) unless the policy is a named driver policy under |
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Section 1952.0545 that excludes such individuals, by: |
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(A) a licensed resident relative; and |
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(B) any other licensed operator using the vehicle |
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with the express or implied permission of the insured. |
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SECTION 2. The change in law made by this Act applies only |
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to an insurance policy delivered, issued for delivery, or renewed |
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on or after January 1, 2020. An insurance policy delivered, issued |
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for delivery, or renewed before January 1, 2020, is governed by the |
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law in effect 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 3. This Act takes effect September 1, 2019. |