HBA-NRS H.B. 3456 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3456
By: Tillery
Insurance
4/8/2001
Introduced



BACKGROUND AND PURPOSE 

Currently, some automobile insurers are denying loss of market value due to
collision damage on the basis that the loss is not covered in the policy.
However, if a private passenger automobile is involved in a subsequent
accident and the insurer exercises the purchase option allowed under the
policy, some insurers are deducting the loss of market value sustained in
the initial accident before arriving at the settlement value of the most
current accident. House Bill 3456 prohibits insurers from deducting loss of
market value when settling subsequent claims involving insured motorists. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 3456 prohibits an insurer from reducing the amount payable for
damage to a motor vehicle for any reduction in the value of the motor
vehicle attributable to previous damage to the motor vehicle unless any
amount paid by the insurer to the insured for the previous claim included
payment for that reduction in value. An insurer that violates this
provision commits an unfair settlement practice and an unfair claim
settlement practice. The bill applies to a settlement of an insured's claim
for damage to or destruction of a motor vehicle under a motor vehicle
insurance policy only if the motor vehicle that is the subject of the claim
had been damaged before the accident that resulted in the claim and the
previous damage to the motor vehicle was the subject of a claim made by the
same insured to the same insurer. 

EFFECTIVE DATE

September 1, 2001, and applies only to an insurance policy that is
delivered, issued for delivery, or renewed on or after January 1, 2002.