INSURANCE CODE
CHAPTER 1952. POLICY PROVISIONS AND FORMS FOR AUTOMOBILE INSURANCE
SUBCHAPTER A. GENERAL PROVISIONS
§ 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, § 2, eff. April 1, 2007.
SUBCHAPTER B. POLICY FORMS AND PROVISIONS IN GENERAL
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
SUBCHAPTER C. UNINSURED OR UNDERINSURED MOTORIST COVERAGE
§ 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 renewal insurance policy if
the named insured rejected the coverage in connection with 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
SUBCHAPTER D. PERSONAL INJURY PROTECTION COVERAGE
§ 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, § 2, eff. April 1, 2007.
§ 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 renewal insurance policy if
the named insured rejected the coverage in connection with 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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) 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.
Added by Acts 2005, 79th Leg., ch. 727, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
SUBCHAPTER E. SHORT-TERM LIABILITY INSURANCE FOR CERTAIN MOTORISTS
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
SUBCHAPTER F. GARAGE INSURANCE
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
SUBCHAPTER G. REPAIR OF MOTOR VEHICLES
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.
§ 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, § 2, eff. April 1, 2007.