79C131(3) KLA

 

CHAPTER 1952.  POLICY PROVISIONS AND FORMS FOR

AUTOMOBILE INSURANCE

SUBCHAPTER A.  GENERAL PROVISIONS

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.01, Sec. (a) (part).)

Source Law

Art. 5.01.  (a)  Every insurance company, corporation, interinsurance exchange, mutual, reciprocal, association, Lloyd's or other insurer, hereinafter called insurer, writing any form of motor vehicle insurance in this State, … .

Revisor's Note

(1)  Section (a), V.T.I.C. Article 5.01, in part states the general applicability of Subchapter A, V.T.I.C. Chapter 5.  The provisions revised in this chapter are derived from that subchapter.  V.T.I.C. Article 5.01C, revised in this chapter as Subchapter E, is included in Subchapter A, Chapter 5.  Section 1(1), Article 5.01C, revised in this chapter as Section 1952.201, states the applicability of Article 5.01C, which is different from the general applicability of Subchapter A, Chapter 5.  For that reason, the revised law adds a cross-reference to Section 1952.201 for the convenience of the reader.

(2)  Section (a), V.T.I.C. Article 5.01, refers to an "interinsurance exchange," a "mutual," a "reciprocal," and a "Lloyd's."  For consistent use of terminology throughout this code, the revised law substitutes for the quoted language references to a "reciprocal or interinsurance exchange," a "mutual insurance company," and a "Lloyd's plan."  Similar changes have been made throughout this chapter.

(3)  Section (a), V.T.I.C. Article 5.01, refers to "motor vehicle insurance."  Throughout this chapter, the revised law substitutes "automobile insurance" for "motor vehicle insurance" for consistency of terminology in this code.  "Automobile insurance" is the term more commonly used to describe the kind of insurance that provides coverage for motor vehicles.

[Sections 1952.002-1952.050 reserved for expansion]

SUBCHAPTER B.  POLICY FORMS AND PROVISIONS IN GENERAL

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06, Sec. 12(a).)

Source Law

(12)(a)  Notwithstanding Subsections (1)-(10) of this article, policy forms and endorsements for automobile insurance in this state are regulated under Article 5.13-2 of this code.

Revisor's Note

Section (12)(a), V.T.I.C. Article 5.06, provides that "[n]otwithstanding Subsections (1)-(10) of this article," policy forms and endorsements for automobile insurance in this state are regulated under V.T.I.C. Article 5.13-2.  The relevant provisions of Article 5.13–2 that are revised are contained in Chapter 2301.  That chapter also contains provisions that are derived from V.T.I.C. Article 5.145.  The revised law appropriately refers to Chapter 2301 in its entirety because the provisions of that chapter that are derived from Article 5.145 are necessary to construe the provisions of Article 5.13-2 that are revised in that chapter.

In addition, the revised law substitutes a reference to "Subsections (1)-(4) and (7), Article 5.06," for the reference to Subsections (1)-(10) of that article because Subsections (5) and (6), revised in this chapter as Section 1952.055, Subsection (8), revised in this chapter as Section 1952.053, and Subsections (9) and (10), revised in this chapter as Section 1952.054, apply on their own terms and do not conflict with Article 5.13-2.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06, Sec. (12)(b).)

Source Law

(b)  An insurer may continue to use the policy forms and endorsements promulgated, approved, or adopted by the commissioner under this article before the effective date of S.B. No. 14, Acts of the 78th Legislature, Regular Session, 2003, on notification in writing to the commissioner that the insurer will continue to use the policy forms and endorsements promulgated, approved, or adopted by the commissioner under this article.

Revisor's Note

(1)  Section (12)(b), V.T.I.C. Article 5.06, refers to forms and endorsements "promulgated, approved, or adopted" by the commissioner of insurance under V.T.I.C. Article 5.06, revised in this subchapter.  The revised law omits "promulgated" as unnecessary.  Article 5.06 authorizes the commissioner to adopt or approve forms and endorsements, but does not authorize the commissioner to promulgate forms or endorsements.

(2)  Section 12(b), V.T.I.C. Article 5.06, refers to "the effective date of S.B. No. 14, [Chapter 206,] Acts of the 78th Legislature, Regular Session, 2003."  That act had various effective dates.  The revised law substitutes a reference to "June 11, 2003," for the quoted language because the general effective date of Chapter 206 was June 11, 2003.  Furthermore, Article 5.06 was amended by Article 21 of Chapter 206, and the effective date of that article was also June 11, 2003.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06, Sec. (8).)

Source Law

(8)  The Board may withdraw its approval of a policy or endorsement form at any time, after notice and hearing.

Revisor's Note

(1)  Section (8), V.T.I.C. Article 5.06, refers to the "Board," meaning the Board of Insurance Commissioners.  Under Chapter 499, Acts of the 55th Legislature, Regular Session, 1957, administration of the insurance laws of this state was reorganized and the powers and duties of the Board of Insurance Commissioners were transferred to the State Board of Insurance.  Chapter 685, Acts of the 73rd Legislature, Regular Session, 1993, abolished the State Board of Insurance and transferred its functions to the commissioner of insurance and the Texas Department of Insurance.  Throughout this chapter, references to the "Board" have been changed appropriately.

(2)  Section (8), V.T.I.C. Article 5.06, provides that the "Board," meaning the commissioner of insurance for the reason stated in Revisor's Note (1) to this section, may withdraw the board's approval of a policy or endorsement form "at any time, after notice and hearing."  The revised law omits "at any time" as unnecessary and misleading.  A grant of power to the commissioner, absent any language limiting the exercise of the power, implies that the commissioner may exercise the power at appropriate times.  "At any time" is misleading because it contradicts the source law's requirement of notice and hearing, which acts as a restriction on the time at which the commissioner can act.

Revised Law

Sec. 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.

(V.T.I.C. Art. 5.06, Secs. (9) (part), (10) (part).)

Source Law

(9)  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 and must contain a statement as follows:

"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."

(10)  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."

Revisor's Note

Section (11), V.T.I.C. Article 5.06, defines "time-based rating plan" and "mile-based rating plan" to have the meanings assigned by V.T.I.C. Article 5.01-4.  Sections (9) and (10), Article 5.06, refer to policy premiums computed on a time-based rating plan and a mile-based rating plan.  The revised law omits Section (11) and the provisions of Sections (9) and (10) relating to both types of rating plans because the plans no longer exist.  V.T.I.C. Article 5.01-4, which created time-based rating plans and mile-based rating plans and authorized the use of those rating plans, expired on September 1, 2005.  The omitted law reads:

(9)  [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] if the policy premium is computed using a time-based rating plan, or written for less than 1,000 miles if the policy premium is computed using a mile-based rating plan, … .

(10)  [Before accepting any premium or fee for a personal automobile insurance policy or binder for a term of less than 30 days] if the policy premium is computed using a time-based rating plan, or written for less than 1,000 miles if the policy premium is computed using a mile-based rating plan, … .

(11)  In this article, the terms "time-based rating plan" and "mile-based rating plan" have the meanings assigned by Article 5.01-4 of this code.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06, Secs. (5), (6).)

Source Law

(5)  An insurer, if in compliance with applicable requirements and conditions, may issue and deliver a certificate of insurance as a substitute for the entire policy of insurance.  The certificate of insurance shall make reference to and identify the policy form adopted or approved by the Board for which the substitution of certificate is made.  The certificate shall be in such form as is prescribed by the Board.  The certificate will represent the policy of insurance, and when issued, shall be 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 of the policy as are provided in the policy, and that insurance policy information is to be shown on and adequately referenced by the certificate of insurance issued by the insurer to the insured.  Reference shall be made in the certificate, or in subsequent attachments, to all endorsements to the policy of insurance.  The certificate shall be executed in the same manner as though a policy were issued.  When the certificate is substituted for the policy of insurance by an insurer, the insurer shall simultaneously furnish to the insured receiving the certificate an "outline of coverages", the form and content of which has been approved by the Board. At the request of an insured at any time, an insurer which has substituted a certificate for a policy of insurance shall provide a copy of the policy.

(6)  The Board may promulgate such rules as are necessary to implement the certificate in lieu of policy provision herein, including a rule limiting the application thereof to private passenger automobile policies.

Revisor's Note

(1)  Section (5), V.T.I.C. Article 5.06, refers to "requirements and conditions" applicable to an insurer.  The revised law omits "conditions" because, in this context, "conditions" is included within the meaning of "requirements."

(2)  Section (5), V.T.I.C. Article 5.06, requires an insurer that has substituted a certificate of insurance for an insurance policy to provide the insured with a copy of the policy "[a]t the request of [the] insured at any time."  The revised law omits "at any time" as unnecessary. The grant of a right to an insured, absent any language limiting the exercise of the right, implies that the insured may exercise the right at any time.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-6.)

Source Law

Art. 5.06-6.  A personal automobile policy or any similar policy form adopted or approved by the commissioner under Article 5.06 of this code or filed under Article 5.145 of this code that covers liability arising out of ownership, maintenance, or use of a motor vehicle of a spouse, who is otherwise insured by the policy, shall contain a provision to continue coverage for the spouse during a period of separation in contemplation of divorce.

Revisor's Note

V.T.I.C. Article 5.06-6 refers to a policy form filed under V.T.I.C. Article 5.145.  The relevant provisions of that article are revised as Subchapter B, Chapter 2301, of this code.  The revised law is drafted accordingly.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-5.)

Source Law

Art. 5.06-5.  (a)  A motor vehicle insurance policy delivered or issued for delivery in this state may not provide payment on final conviction of the named insured for loss for a covered motor vehicle that is 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 the federal Controlled Substances Act, 21 U.S.C. Section 801 et seq.  For the purpose of this section a named insured shall be the person named on the declaration page of an automobile insurance policy and his or her spouse if the policy is written on an individual.  If a policy is other than an individual policy, a named insured shall be the company or corporation named on the declaration page of an automobile insurance policy and any officer, director, or stockholder of that company or corporation.

(b)  An insurer may not deliver or issue for delivery in this state a motor vehicle insurance policy that provides payment on final conviction of the named insured for loss for a covered motor vehicle that is 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 the federal Controlled Substances Act, 21 U.S.C. Section 801 et seq.

Revised Law

Sec. 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 for, and a cause of action does not arise against the insurer, agent, or employee with respect to, 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.  (V.T.I.C. Art. 5.06-4.)

Source Law

Art. 5.06-4. (a)  Any insurer desiring to write commercial automobile liability insurance in this state must provide loss control information as a prerequisite for writing that insurance.

(b)  The insurer shall provide loss control information to its policyholders reasonably commensurate with the risks and exposures and experience of the insured's business.  To provide this information or services, the insurer may employ qualified personnel, retain qualified independent contractors, contract with the policyholder to provide qualified accident prevention personnel and services, or use a combination of the methods provided by this section.

(c)  If there is evidence that reasonable loss control information is not being provided by the insurer or is not being used by the insurer in a reasonable manner to reduce losses, the State Board of Insurance shall order a hearing to determine if the insurer is not in compliance with this article.  If it is determined that the insurer is not in compliance, the board may impose any of the sanctions authorized by Section 7, Article 1.10, of this code.

(d)  The State Board of Insurance may promulgate reasonable rules and regulations for the enforcement of this article after holding a public hearing on the proposed rules and regulations.

(e)  An insurer or its agents, servants, or employees are not liable for, and no cause of action arises with respect to, 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 its insured. However, this immunity does not affect the liability of an insurer for compensation or as otherwise provided in a policy of insurance.

(f)  Loss control information provided by an insurer to an insured pursuant to this article is not subject to discovery or admissible in any civil proceeding as evidence.

Revisor's Note

(1)  Section (b), V.T.I.C. Article 5.06-4, refers to "qualified accident prevention personnel and services."  The revised law substitutes "qualified loss control personnel and services" for "qualified accident prevention personnel and services" because "qualified loss control personnel and services" more accurately describes the type of personnel and services provided with respect to automobile insurance.

(2)  Section (d), V.T.I.C. Art. 5.06-4, authorizes the State Board of Insurance to adopt certain "rules and regulations" after holding a public hearing on the proposed "rules and regulations."  For the reason stated in Revisor's Note (1) to Section 1952.053, the commissioner of insurance has the authority formerly granted to the board.  The revised law omits as unnecessary the references to "regulations" because a rule is defined under Section 311.005(5), Government Code (Code Construction Act), to include a regulation, and that definition applies to the revised law.

[Sections 1952.059-1952.100 reserved for expansion]

SUBCHAPTER C.  UNINSURED OR UNDERINSURED MOTORIST COVERAGE

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-1, Sec. (1).)

Source Law

Art. 5.06-1. (1)  No automobile liability insurance (including insurance issued pursuant to an Assigned Risk Plan established under authority of Section 35 of the Texas Motor Vehicle Safety-Responsibility Act), covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state unless coverage is provided therein or supplemental thereto, in at least the limits described in the Texas Motor Vehicle Safety-Responsibility Act, under provisions prescribed by the Board, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury, sickness, or disease, including death, or property damage resulting therefrom.  The coverages required under this Article shall not be applicable where any insured named in the policy shall reject the coverage in writing;  provided that unless the named insured thereafter requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured has rejected the coverage in connection with a policy previously issued to him by the same insurer or by an affiliated insurer.

Revisor's Note

(1)  Section (1), V.T.I.C. Article 5.06-1, refers to "the Texas Motor Vehicle Safety-Responsibility Act" and to an "Assigned Risk Plan established under authority of Section 35 of the Texas Motor Vehicle Safety-Responsibility Act."  That act, formerly Article 6701h, Vernon's Texas Civil Statutes, was codified in 1995 as Chapter 601, Transportation Code. Section 35, Article 6701h, provided for insurers to establish an "administrative agency" to administer an assigned risk plan to provide motor vehicle liability insurance to persons "unable to secure it through ordinary methods."  Section 35 was repealed by Section 14.08, Chapter 685, Acts of the 73rd Legislature, Regular Session, 1993.  Section 14.03 of that act added V.T.I.C. Article 21.81, which created the Texas Automobile Insurance Plan Association.  The association's primary duty is to provide eligible persons with insurance required under the Texas Motor Vehicle Safety-Responsibility Act.  Section 14.09(b) of that act required the administrative agency created under Section 35, Article 6701h, to transfer its assets and obligations to the Texas Automobile Insurance Plan Association.  Throughout this chapter, the revised law is drafted accordingly.

(2)  Section (1), V.T.I.C. Article 5.06-1,  prohibits an insurer from delivering or issuing for delivery an automobile insurance policy unless the insurer provides coverage "under provisions prescribed by the Board," meaning the commissioner of insurance for the reasons stated in Revisor's Note (1) to Section 1952.053.  The revised law omits the quoted phrase as unnecessary and misleading for the reasons that follow.  Before June 11, 2003, the commissioner adopted and approved policy forms for automobile insurance under V.T.I.C. Article 5.06.  In 2003, the legislature enacted Chapter 206, Acts of the 78th Legislature, Regular Session, which provides that policy forms for various kinds of insurance, including automobile insurance, are now governed by V.T.I.C. Article 5.13-2.  However, under Section 2(b), V.T.I.C. Article 5.145, an insurer is authorized to continue using policy forms previously approved or adopted under Article 5.06.  Therefore, under the current regulatory system for policy forms for automobile insurance, an insurer is authorized to use policy forms that are subject to Article 5.13-2 or to Article 5.06.  Those articles by their terms prescribe the requirements for the policy forms that are subject to them, and those requirements apply to the provisions for uninsured or underinsured motorist coverage under Article 5.06-1 contained in the forms without a statement to that effect.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-1, Secs. (2)(a), (c).)

Source Law

(2)  For the purpose of these coverages: (a)  the term "uninsured motor vehicle" shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency.

(c)  The commissioner may, in the policy forms adopted under Article 5.06 of this code, define "uninsured motor vehicle" to exclude certain motor vehicles whose operators are in fact uninsured.  The commissioner may in the policy forms filed under Article 5.145 of this code allow the term "uninsured motor vehicle" to be defined to exclude certain motor vehicles whose operators are in fact uninsured.

Revisor's Note

Section (2)(a), V.T.I.C. Article 5.06-1, refers to "terms and conditions" of uninsured motor vehicle coverage.  Throughout this chapter, the revised law omits "conditions" as unnecessary because "conditions" is included within the meaning of "terms."

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-1, Sec. (2)(b).)

Source Law

(2)  For the purpose of these coverages:

(b)  The term "underinsured motor vehicle" means an insured motor vehicle on which there is valid and collectible liability insurance coverage with limits of liability for the owner or operator which 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.

Revisor's Note

Section (2)(b), V.T.I.C. Article 5.06-1, refers to "valid and collectible" liability insurance coverage.  The revised law omits the reference to "valid" as unnecessary because a policy that is not valid is not collectible.

Revised Law

Sec. 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. (V.T.I.C. Art. 5.06-1, Sec. (2)(d).)

Source Law

(d)  The portion of a policy form adopted under Article 5.06 of this code or filed under Article 5.145 of this code to provide coverage under this article shall include provisions 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 any one occurrence shall not exceed the limit of liability for these coverages as stated in the policy and the total aggregate limit of liability to all claimants, if more than one, shall not exceed the total limit of liability per occurrence as stated in the policy; and shall 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.  The portion of a policy form adopted under Article 5.06 of this code or filed under Article 5.145 of this code to provide coverage under this article shall require that in order for the insured to recover under the uninsured motorist coverages where the owner or operator of any motor vehicle which 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 such unknown person and the person or property of the insured.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-1, Secs. (3), (4)(a).)

Source Law

(3)  The limits of liability for bodily injury, sickness, or disease, including death, shall be offered to the insured in amounts not less than those prescribed in the Texas Motor Vehicle Safety-Responsibility Act and such higher available limits as may be desired by the insured, but not greater than the limits of liability specified in the bodily injury liability provisions of the insured's policy.

(4)(a)  Coverage for property damage shall be offered to the insured in amounts not less than those prescribed in the Texas Motor Vehicle Safety-Responsibility Act and such higher available limits as may be desired by the insured, but not greater than limits of liability specified in the property damage liability provisions of the insured's policy, subject to a deductible amount of $250.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-1, Sec. (5).)

Source Law

(5)  The underinsured motorist coverage shall provide for payment to the insured of all sums which he shall be legally entitled to recover as damages from owners or operators of underinsured motor vehicles because of bodily injury or property damage in an amount up to the limit specified in the policy, reduced by the amount recovered or recoverable from the insurer of the underinsured motor vehicle.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-1, Sec. (4)(b).)

Source Law

(b)  If the insured has collision coverage and uninsured or underinsured property damage liability coverage, the insured may recover under the policy coverage chosen by the insured.  In the event neither coverage is sufficient alone to cover all damage resulting from a single occurrence, the insured may recover under both coverages.  When 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. If both coverages are utilized in the payment of damages from a single occurrence, the insured shall 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 utilized in the payment of 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 be required to pay in respect of the secondary coverage only the difference between the amount of the two deductibles.  In no event shall the insured recover under both coverages more than the actual damages suffered.

Revised Law

Sec. 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 G, 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.  (V.T.I.C. Art. 5.06-1, Sec. (6).)

Source Law

(6)  In the event of payment to any person under any coverage required by this Section and subject to the terms and conditions of such coverage, the insurer making such payment shall, to the extent thereof, be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury, sickness or disease, or death for which such payment is made, including the proceeds recoverable from the assets of the insolvent insurer; provided, however, whenever an insurer shall make payment under a policy of insurance issued pursuant to this Act, which payment is occasioned by the insolvency of an insurer, the insured of said insolvent insurer shall be given credit in any judgment obtained against him, with respect to his legal liability for such damages, to the extent of such payment, but, subject to Section 12 of Article 21.28-C of this code, such paying insurer shall have the right to proceed directly against the insolvent insurer or its receiver, and in pursuance of such right such paying insurer shall possess any rights which the insured of the insolvent company might otherwise have had if the insured of the insolvent insurer had made the payment.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-1, Sec. (7).)

Source Law

(7)  If a dispute exists as to whether a motor vehicle is uninsured, the burden of proof as to that issue shall be upon the insurer.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-1, Sec. (8).)

Source Law

(8)  Notwithstanding Section 15.032, Civil Practice and Remedies Code, an action against an insurer in relation to the coverage provided under this article, including an action to enforce that coverage, may be brought only:

(a)  in the county in which the policyholder or beneficiary instituting the suit resided at the time of the accident; or

(b)  in the county in which the accident involving the uninsured or underinsured motor vehicle occurred.

[Sections 1952.111-1952.150 reserved for expansion]

SUBCHAPTER D.  PERSONAL INJURY PROTECTION COVERAGE

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-3, Sec. (b) (part).)

Source Law

(b)  "Personal injury protection" consists of provisions of a motor vehicle liability policy which provide for payment to the named insured in the motor vehicle liability policy and members of the insured's household, any authorized operator or passenger of the named insured's motor vehicle including a guest occupant, … of all reasonable expenses arising from the accident and incurred within three years from the date thereof for necessary medical, surgical, X-ray and dental services, including prosthetic devices, and necessary ambulance, hospital, professional nursing and funeral services, and in the case of an income producer, payment of benefits for loss of income as the result of the accident; and where the person injured in the accident was not an income or wage producer at the time of the accident, payments of benefits must be made in 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. …

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-3, Sec. (a).)

Source Law

Art. 5.06-3.  (a)  No automobile liability insurance policy, including insurance issued pursuant to an assigned risk plan established under authority of Section 35 of the Texas Motor Vehicle Safety-Responsibility Act, covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state unless personal injury protection coverage is provided therein or supplemental thereto.  The coverage required by this article shall not be applicable if any insured named in the policy shall reject the coverage in writing; provided, unless the named insured thereafter requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy if the named insured has rejected the coverage in connection with a policy previously issued to him by the same insurer or by an affiliated insurer.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-3, Sec. (b) (part).)

Source Law

(b)  …  up to an amount of $2,500 for each such person for payment … .  The personal injury protection in this paragraph specified shall not exceed $2,500 for all benefits, in the aggregate, for each person.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-3, Sec. (b) (part).)

Source Law

(b)  …  The insurer providing loss of income benefits may require, as a condition of receiving such benefits, that the insured person furnish the insurer reasonable medical proof of his injury causing loss of income.  …

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-3, Sec. (c).)

Source Law

(c)  The benefits required by this Act shall be payable without regard to the fault or non-fault of the named insured or the recipient in causing or contributing to the accident, and without regard to any collateral source of medical, hospital, or wage continuation benefits.  An insurer paying benefits pursuant to this Act shall have no right of subrogation and no claim against any other person or insurer to recover any such benefits by reason of the alleged fault of such other person in causing or contributing to the accident.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-3, Sec. (d) (part).)

Source Law

(d)  All payments of benefits prescribed under this Act shall be made periodically as the claims therefor arise and within thirty (30) days after satisfactory proof thereof is received by the insurer subject to the following limitations:

(1)  The coverage described in this Act may prescribe a period of not less than six months after the date of accident within which the original proof of loss with respect to a claim for benefits must be presented to the insurer.

(2)  The coverage described in this Act may provide that in any instance where a lapse occurs in the period of total disability or in the medical treatment of an injured person who has received benefits under such coverage and such person subsequently claims additional benefits based upon an alleged recurrence of the injury for which the original claim for benefits was made, the insurer may require reasonable medical proof of such alleged recurrence;  provided, that in no event shall the aggregate benefits payable to any person exceed the maximum limits prescribed in the policy.

… .

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-3, Sec. (d) (part).)

Source Law

(d)  [All payments of benefits prescribed under this Act shall be made periodically as the claims therefor arise and within thirty (30) days after satisfactory proof thereof is received by the insurer subject to the following limitations:]

…

(3)  In the event the insurer fails to pay such benefits when due, the person entitled to such benefits may bring an action in contract to recover the same; and, in the event the insurer is required to pay such benefits, the person entitled to such benefits shall be entitled to recover reasonable attorneys fees plus 12% penalty, plus interest thereon at the legal rate from the date such sums became overdue.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-3, Sec. (e).)

Source Law

(e)  An insurer shall exclude benefits to any insured, or his personal representative, under a policy required by Section 1, when the insured's conduct contributed to the injury he sustained in any of the following ways:

(1)  Causing injury to himself intentionally.

(2)  While in the commission of a felony, or while seeking to elude lawful apprehension or arrest by a law enforcement official.

Revisor's Note

Section (e), V.T.I.C. Article 5.06-3, refers to a policy required by "Section 1."  Neither Article 5.06-3 nor Section (e) contains a Section 1.  It is clear from the context of the source law that "Section 1" is referring to Section 1 of Chapter 52, Acts of the 63rd Legislature, Regular Session, 1973, which enacted Article 5.06-3.  The substance of Article 5.06-3 is revised throughout this subchapter.  Therefore, the revised law substitutes a reference to "this subchapter" for the reference to "Section 1."

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-3, Sec. (h).)

Source Law

(h)  When any liability claim is made by any guest or passenger described in paragraph (b) hereof against the owner or operator of the motor vehicle in which he was riding or the owner's or operator's liability insurance carrier, the owner or operator of such motor vehicle or his liability insurance carrier shall be entitled to an offset, credit or deduction against any award made to such guest or passenger in an amount of money equal to the amounts paid by the owner, operator or his automobile liability insurance carrier under "personal injury protection" as defined in this Act to such guests or passengers;  provided, however, that nothing herein shall be construed to authorize a direct action against a liability insurance company if such right does not presently exist at law.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-3, Sec. (f).)

Source Law

(f)  This article applies only to motor vehicle insurance policies subject to this subchapter and does not apply to other accident or health policies even though they promise indemnity against automobile-connected injuries.

Revisor's Note

Section (f), V.T.I.C. Article 5.06-3, refers to an automobile insurance policy subject to "this subchapter," meaning Subchapter A, V.T.I.C. Chapter 5.  Portions of Subchapter A, Chapter 5, are revised in various chapters in this code.  The provisions of Subchapter A that are revised and that regulate automobile insurance policies are revised in Subtitle C, Title 5, which includes this chapter.  Other provisions of Subchapter A have not been revised.  The revised law is drafted accordingly.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-3, Sec. (g).)

Source Law

(g)  Nothing contained in this Act shall affect the offering of medical payments coverage, disability benefits, and accidental death benefits, as presently prescribed by the State Board of Insurance; and nothing contained in this Act shall be construed to prevent an insurer from providing broader benefits than the minimum benefits enumerated in this Act subject to the rules and forms prescribed by the State Board of Insurance.

Revisor's Note

Section (g), V.T.I.C. Article 5.06-3, refers to "forms prescribed by the State Board of Insurance," meaning the commissioner of insurance for the reasons stated in Revisor's Note (1) to Section 1952.053.  The revised law omits the reference to forms prescribed by the commissioner as unnecessary and misleading for the reason stated in Revisor's Note (2) to Section 1952.101.

[Sections 1952.162-1952.200 reserved for expansion]

SUBCHAPTER E.  SHORT-TERM LIABILITY INSURANCE FOR

CERTAIN MOTORISTS

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.01C, Sec. 1(1).)

Source Law

Art. 5.01C

Sec. 1.  In this article:

(1)  "Insurer" means an insurance company, interinsurance exchange, mutual, capital stock company, county mutual, reciprocal association, Lloyd's plan insurer, or other entity authorized to write motor vehicle insurance in this state.

Revisor's Note

Section 1(1), V.T.I.C. Article 5.01C, refers to an "interinsurance exchange," a "mutual," a "county mutual," a "reciprocal association," and a "Lloyd's plan insurer."  The revised law substitutes for the quoted language references to a "reciprocal or interinsurance exchange," a "mutual insurance company," a "county mutual insurance company," and a "Lloyd's plan" for the reason stated in Revisor's Note (2) to Section 1952.001.

Revised Law

Sec. 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).  (V.T.I.C. Art. 5.01C, Secs. 1(2), (3).)

Source Law

(2)  "Motor vehicle" means any private passenger vehicle or utility type vehicle that has a gross weight of 25,000 pounds or less.

(3)  "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 insurance company by the Texas Automobile Insurance Plan Association under Section 4(a), Article 21.81, of this code.

Revised Law

Sec. 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 non-resident 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.  (V.T.I.C. Art. 5.01C, Sec. 2.)

Source Law

Sec. 2.  (a)  The commissioner by rule may establish a program to provide for the sale of short-term liability insurance policies to non-Texas resident motorists visiting this state.

(b)  The commissioner may negotiate an agreement with any insurer under which the insurer will sell policies described by Subsection (a)  of this section.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.01C, Sec. 3.)

Source Law

Sec. 3.  A person representing an insurer in selling short-term liability insurance policies under this article must be licensed under Subchapter A, Chapter 21, of this code.

Revisor's Note

Section 3, V.T.I.C. Article 5.01C, requires certain persons to be licensed under "Subchapter A, Chapter 21, of this code."  Subchapter A, V.T.I.C. Chapter 21, is revised in various chapters in this code.  The portions of Subchapter A, Chapter 21, relevant to licensing agents are revised in Title 13 of this code. The revised law is drafted accordingly.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.01C, Sec. 4.)

Source Law

Sec. 4.  An insurer selling short-term liability insurance policies under this article must use the policy forms adopted by the commissioner under Article 5.06 of this code or filed and in effect as provided by Article 5.145 of this code unless the insurer is exempt from using those forms.

[Sections 1952.206-1952.250 reserved for expansion]

SUBCHAPTER F.  GARAGE INSURANCE

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.06-2, Sec. (1) (part).)

Source Law

Art. 5.06-2.  (1)  Definitions.  As used in this Act:

(a)  "Garage Insurance" means motor vehicle or automobile insurance as defined in Article 5.01 hereof issued to a named insured engaged in the business of selling, servicing or repairing motor vehicles as now or hereafter defined by rules, regulations or orders of the State Board of Insurance;

(b)  "Garage Customer" means any person or organization other than the named insured, or an employee, director, officer, stockholder, partner, or agent of the named insured; or a resident of the same household as the named insured, such employee, director, officer, stockholder, partner, or agent;

… .

Revisor's Note

Section (1)(a), V.T.I.C. Article 5.06-2, refers to motor vehicles "as now or hereafter defined by rules, regulations or orders of the State Board of Insurance." The revised law omits "as now or hereafter" because under Section 311.027, Government Code (Code Construction Act), applicable to the revised law, a reference to a rule applies to all reenactments, revisions, and amendments of the rule.  The reference to "regulations" is omitted from the revised law for the reason stated in Revisor's Note (2) to Section 1952.058.

Revised Law

Sec. 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).  (V.T.I.C. Art. 5.06-2, Secs. (1) (part), (2).)

Source Law

Art. 5.06-2.  (1)  Definitions.  As used in this Act:

…

(c)  "Financial Responsibility Limits" means the minimum limits specified by the Texas Motor Vehicle Safety-Responsibility Act.

(2)  A policy of garage insurance may contain a provision to the effect that garage customers are not insureds under the garage insurance policy and that the garage insurance shall not apply to garage customers, except to the extent that other valid and collectible insurance, if any, available to the garage customer is not equal to the financial responsibility limits.  Notwithstanding any provision to the contrary in such other policy or policies of insurance as to whether such insurance is primary, excess, or contingent insurance, or otherwise, such other valid and collectible insurance shall be primary insurance as to the garage customer.  Any garage insurance policy containing such a provision shall not cover garage customers except to such extent, notwithstanding the terms and provisions of such other policy or policies of insurance.

Revisor's Note

(1)  Section (2), V.T.I.C. Article 5.06-2, refers to "valid and collectible" insurance.  The revised law omits "valid" for the reason stated in the revisor's note to Section 1952.103.

(2)  Section (2), V.T.I.C. Article 5.06-2, refers to the "terms and provisions" of an insurance policy.  The revised law omits "provisions" because, in this context, "provisions" is included in the meaning of "terms."

Revisor's Note

(End of Subchapter)

Section (3), V.T.I.C. Article 5.06-2, provides that Article 5.06-2 applies only to "insurance policies issued or renewed or made subject to this Act by endorsement after the effective date hereof." The revised law omits this provision as obsolete.  Article 5.06-2 was added by Chapter 35, Acts of the 61st Legislature, 2nd Called Session, 1969.  That act took effect September 19, 1969.  Any insurance policy issued before that date has, by now, been renewed.  The omitted law reads:

(3)  This Act shall apply only to insurance policies issued or renewed or made subject to this Act by endorsement after the effective date hereof.

[Sections 1952.253-1952.300 reserved for expansion]

SUBCHAPTER G.  REPAIR OF MOTOR VEHICLES

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.07-1, Secs. (a), (g).)

Source Law

Art. 5.07-1.  (a)  Except as provided by rules duly adopted by the commissioner, under an auto insurance policy that is delivered, issued for delivery, or renewed in this state an insurer may not, directly or indirectly, limit its coverage under a policy covering damage to a motor vehicle by specifying the brand, type, kind, age, vendor, supplier, or condition of parts or products that may be used to repair the vehicle or by limiting the beneficiary of the policy from selecting a repair person or facility to repair damage to the motor vehicle covered under the policy.

(g)  In the settlement of liability claims 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.

Revisor's Note

Section (a), V.T.I.C. Article 5.07-1, refers to rules "duly" adopted by the commissioner of insurance.  The revised law omits "duly" as unnecessary because the term does not add to the clear meaning of the law.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.07-1, Sec. (b).)

Source Law

(b)  In connection with the repair of damage to a motor vehicle covered under an auto insurance policy, an insurer, an employee of an insurer, an agent of an insurer, a solicitor of insurance for 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 a specific repair person or facility or a repair person or facility identified on a preferred list compiled by an insurer must be used by a beneficiary in order for the damage repair or parts replacement to be covered by the policy; or

(3)  restrict a beneficiary's or third-party claimant's right to choose a repair person or facility by requiring the beneficiary or third-party claimant to travel an unreasonable distance to repair the damage.

Revisor's Note

Section (b), V.T.I.C. Article 5.07-1, refers to a "solicitor of insurance" for an insurer.  The revised law omits the reference to "solicitor" because that term, as it relates to a particular type of person engaged in the business of insurance, was eliminated by Chapter 703, Acts of the 77th Legislature, Regular Session, 2001, and a person who performs the duties formerly performed by a solicitor is now regulated as an "agent."

Revised Law

Sec. 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).  (V.T.I.C. Art. 5.07-1, Secs. (c), (h).)

Source Law

(c)  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 the insured's auto insurance policy.

(h)  The commissioner may exercise the rule-making authority under Article 21.21-2 of this code with respect to any fraudulent activity of any party to an agreement described by Subsection (c) of this article.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.07-1, Sec. (d).)

Source Law

(d)  An insurer may not prohibit a repair person or facility from providing a beneficiary or third-party claimant with information that states the description, manufacturer, or source of the parts used and the amounts charged to the insurer for the parts and related labor.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.07-1, Sec. (e).)

Source Law

(e)  At the time the vehicle is presented to an insurer or an insurance adjuster or other person in connection with a claim for damage repair, the insurer or insurance adjuster or other person shall provide to the beneficiary or third-party claimant notice of the provisions of this article.  The commissioner shall adopt a rule establishing the method or methods insurers shall use to comply with the notice provisions in this subsection.

Revised Law

Sec. 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.  (V.T.I.C. Art. 5.07-1, Sec. (f).)

Source Law

(f)  Any 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 article.

Revised Law

Sec. 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 instead 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.  (V.T.I.C. Art. 5.07-1, Sec. (i).)

Source Law

(i)  Any rules adopted by the commissioner to implement this article shall include, but not be limited to, requirements that:

(1)  any limitation described in Subsection (a) of this section is clearly and prominently displayed on the face of the policy or certificate in lieu of a policy; and

(2)  the insured give written consent to such a limitation, following both oral and written notification of any limitation at the time the policy is purchased.

Revisor's Note

Section (i), V.T.I.C. Article 5.07-1, states that rules shall "include, but not be limited to," certain requirements.  "[B]ut not be limited to" is omitted as unnecessary because Section 311.005(13), Government Code (Code Construction Act), applicable to the revised law, and Section 312.011(19), Government Code, provide that "includes" and "including" are terms of enlargement and not of limitation and do not create a presumption that components not expressed are excluded.