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.