HB 0769 2003
1	A bill to be entitled
2	An act relating to motor vehicle service agreements;
3	amending s. 634.011, F.S.; revising criteria within a
4	definition of a motor vehicle service agreement relating
5	to preestablished flat amounts; providing a limitation;
6	amending s. 634.121, F.S.; providing for disapproval of
7	certain service agreement forms for not indicating the
8	preestablished flat amount payable under the agreement;
9	providing an effective date.
10
11	Be It Enacted by the Legislature of the State of Florida:
12
13	Section 1. Paragraph (b) of subsection (8) of section
14	634.011, Florida Statutes, is amended to read:
15	634.011 Definitions.--As used in this part, the term:
16	(8) "Motor vehicle service agreement" or "service
17	agreement" means any contract or agreement indemnifying the
18	service agreement holder for the motor vehicle listed on the
19	service agreement and arising out of the ownership, operation,
20	and use of the motor vehicle against loss caused by failure of
21	any mechanical or other component part, or any mechanical or
22	other component part that does not function as it was originally
23	intended; however, nothing in this part shall prohibit or affect
24	the giving, free of charge, of the usual performance guarantees
25	by manufacturers or dealers in connection with the sale of motor
26	vehicles. Transactions exempt under s. 624.125 are expressly
27	excluded from this definition and are exempt from the provisions
28	of this part. The term "motor vehicle service agreement"
29	includes any contract or agreement that provides:
30	(b) For payment of vehicle protection expenses.
31	1.a. "Vehicle protection expenses" means a preestablished
32	flat amount payable for the loss of or damage to a vehicle or
33	expenses incurred by the service agreement holder for loss or
34	damage to a covered vehicle, including, but not limited to,
35	applicable deductibles under a motor vehicle insurance policy;
36	temporary vehicle rental expenses; expenses for a replacement
37	vehicle that is at least the same year, make, and model of the
38	stolen motor vehicle; sales taxes or registration fees for a
39	replacement vehicle that is at least the same year, make, and
40	model of the stolen vehicle; or other incidental expenses
41	specified in the agreement.
42	b. "Vehicle protection product" means a product or system
43	installed or applied to a motor vehicle or designed to prevent
44	the theft of the motor vehicle or assist in the recovery of the
45	stolen motor vehicle.
46	2. Vehicle protection expenses shall be payable in the
47	event of loss or damage to the vehicle as a result of the
48	failure of the vehicle protection product to prevent the theft
49	of the motor vehicle or to assist in the recovery of the stolen
50	motor vehicle. Vehicle protection expenses covered under the
51	agreement shall be clearly stated in the service agreement form,
52	unless the agreement provides for the payment of a
53	preestablished flat amount, in which case the service agreement
54	form shall clearly identify such amount.
55	3. Motor vehicle service agreements providing for the
56	payment of vehicle protection expenses shall:
57	a. Reimburse a service agreement holder for the following
58	expenses, at a minimum: deductibles applicable to comprehensive
59	coverage under the service agreement holder's motor vehicle
60	insurance policy; temporary vehicle rental expenses; sales taxes
61	and registration fees on a replacement vehicle that is at least
62	the same year, make, and model of the stolen motor vehicle; and
63	the difference between the benefits paid to the service
64	agreement holder for the stolen vehicle under the service
65	agreement holder's comprehensive coverage and the actual cost of
66	a replacement vehicle that is at least the same year, make, and
67	model of the stolen motor vehicle; or
68	b. Pay a preestablished flat amount to the service
69	agreement holder.
70
71	Payments shall not duplicate any benefits or expenses paid to
72	the service agreement holder by the insurer providing
73	comprehensive coverage under a motor vehicle insurance policy
74	covering the stolen motor vehicle, however, the payment of
75	vehicle protection expenses at a preestablished flat amount of
76	$7,500 or less does not duplicate any benefits or expenses
77	payable under any comprehensive motor vehicle insurance policy.
78	Section 2. Paragraph (c) of subsection (1) of section
79	634.121, Florida Statutes, is amended to read:
80	634.121 Filing of forms, required procedures,
81	provisions.--
82	(1) A service agreement form or related form may not be
83	issued or used in this state unless it has been filed with and
84	approved by the department. Upon application for a license, the
85	department shall require the applicant to submit for approval
86	each brochure, pamphlet, circular, form letter, advertisement,
87	or other sales literature or advertising communication addressed
88	or intended for distribution. The department shall disapprove
89	any document which is untrue, deceptive, or misleading or which
90	contains misrepresentations or omissions of material facts.
91	(c) The department shall disapprove any service agreement
92	form providing vehicle protection expenses which does not
93	clearly indicate the method for calculating the benefit to be
94	paid or provided to the service agreement holder or the
95	preestablished flat amount payable pursuant the terms of the
96	service agreement. All service agreement forms providing vehicle
97	protection expenses shall clearly indicate the term of the
98	service agreement, whether new or used cars are eligible for the
99	vehicle protection product, and that the service agreement
100	holder may not make any claim against the Florida Insurance
101	Guarantee Association for vehicle protection expenses. The
102	service agreement shall be provided to a service agreement
103	holder on a form that provides only vehicle protection expenses.
104	A service agreement form providing vehicle protection expenses
105	must state that the service agreement holder must have in force
106	at the time of loss comprehensive motor vehicle insurance
107	coverage as a condition precedent to requesting payment of
108	vehicle protection expenses.
109	Section 3. This act shall take effect upon becoming a law.