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Senate Bill sb1294

Florida Senate - 2006
SB 1294

By Senator Fasano

11-962-06

A bill to be entitled

An act relating to motor vehicle insurance; amending s. 627.744, F.S.; deleting a provision that exempts policies issued in certain counties from the requirement that a private passenger vehicle undergo a preinsurance inspection; deleting a requirement that a physical imprint or other record be made of the vehicle identification number; requiring that a preinsurance inspection include certain color images of the vehicle; providing for suspension of physical damage coverage if the preinsurance inspection is not completed within a specified period; requiring notice and an adjustment in the premium upon suspension of physical damage coverage; providing an effective date.

Be It Enacted by the Legislature of the State of Florida:

Section 1.  Section 627.744, Florida Statutes, is amended to read:

 627.744  Required preinsurance inspection of private passenger motor vehicles.--

 (1)  A private passenger motor vehicle insurance policy providing physical damage coverage, including collision or comprehensive coverage, may not be issued in this state unless the insurer has inspected the motor vehicle in accordance withthis section.

 (2)  This section does not apply:

 (a)  To a policy for a policyholder who has been insured for 2 years or longer, without interruption, under a private passenger motor vehicle policy that which provides physical damage coverage, if the agent of the insurer verifies the previous coverage.

 (b)  To a new, unused motor vehicle purchased from a licensed motor vehicle dealer or leasing company, if the insurer is provided with:

1.  A bill of sale or buyer's order that which contains a full description of the motor vehicle, including all options and accessories; or

2.  A copy of the title which establishes transfer of ownership from the dealer or leasing company to the customer and a copy of the window sticker or the dealer invoice showing the itemized options and equipment and the total retail price of the vehicle.

For the purposes of this paragraph, the physical damage coverage on the motor vehicle may not be suspended during the term of the policy due to the applicant's failure to provide the required documents.  However, payment of a claim is conditioned upon the receipt by the insurer of the required  documents, and no physical damage loss occurring after the effective date of the coverage is payable until the documents are provided to the insurer.

 (c)  To a temporary substitute motor vehicle.

 (d)  To a motor vehicle that which is leased for less than 6 months, if the insurer receives the lease or rental agreement containing a description of the leased motor vehicle, including its condition.  Payment of a physical damage claim is conditioned upon receipt of the lease or rental agreement.

 (e)  To a vehicle that is 10 years old or older, as determined by reference to the model year.

 (f)  To any renewal policy.

 (g)  To a motor vehicle policy issued in a county with a 1988 estimated population of less than 500,000.

 (g)(h)  To any other vehicle or policy exempted by rule of the commission.  The commission may base a rule under this paragraph only on a determination that the likelihood of a fraudulent physical damage claim is remote or that the inspection would cause a serious hardship to the insurer or the applicant.

 (h)(i)  When the insurer's authorized inspection service has no inspection facility either in the municipality in which the automobile is principally garaged or within 10 miles of such municipality.

 (i)(j)  When the insured vehicle is insured under a commercially rated policy that insures five or more vehicles.

 (j)(k)  When an insurance producer is transferring a book of business from one insurer to another.

 (k)(l)  When an individual insured's coverage is being transferred and initiated by a producer to a new insurer.

 (3)  This subsection does not prohibit an insurer from requiring a preinsurance inspection of any motor vehicle as a condition of issuance of physical damage coverage.

 (4)  The inspection required by this section shall be provided by the insurer or by a person or organization authorized by the insurer.  The applicant may be required to pay the cost of the inspection, not to exceed $5. The inspection shall be recorded on a form prescribed by the commission, and the insurer shall be provided with direct and timely access to the inspection and the images via the Internet or the form or a copy shall be retained by the insurer with its policy records for the insured.  The insurer shall provide a copy of the form to the insured upon request. Any inspection fee paid directly by the applicant may not be considered part of the premium. However, an insurer that provides the inspection at no cost to the applicant may include the expense of the inspection within a rate filing.

 (5)  The inspection shall include at least the following:

 (a)  Taking a physical imprint of the vehicle identification number of the vehicle or otherwise recording the vehicle identification number in a manner prescribed by the commission.

 (a)(b)  Recording the presence of accessories required by the commission to be recorded.

 (b)(c)  Recording the locations of and a description of existing damage to the vehicle.

 (c)  Taking two color images at oblique angles, clearly showing all four sides of the vehicle and any observable prior damage, and taking one color image of the Motor Vehicle Safety Standard Label, which includes the vehicle identification number. As used in this paragraph, the term "color image" means any technology producing a clear visual image in color, including, but not limited to, an instant-type photograph, a photograph using the film process, a digital photograph, or other digital-imaging process that may be accessed, stored, and retrieved via the Internet.

 (6)  An insurer may defer an inspection for 10 business 30 calendar days following the effective date of coverage for a new policy, but not for a renewal policy, and for additional or replacement vehicles to an existing policy, if an inspection at the time of the request for coverage would create a serious inconvenience for the applicant and such hardship is documented in the insured's policy record.

 (7)(a)  The physical damage coverage, including collision and comprehensive coverage, for which preinspection is required under this section shall be suspended if the preinsurance inspection is not completed within 10 business days after the effective date of the coverage. Suspension of coverage applies to all insureds, owners, and lienholders.

 (b)  If physical damage coverage, including collision and comprehensive coverage, is suspended, the insurer shall:

1.  No later than the 30th calendar day after the effective date of suspension, mail a notice of suspension of physical damage coverage to the insured, the producer of record, and any lienholder of record;

2.  Obtain a certificate of mailing or other evidence of mailing the notice of suspension of physical damage coverage to the insured and retain the certificate and copy of the notice with the insurer's policy records for the insured;

and

3.  Make a pro rata adjustment to the premium in the form of a premium refund or credit if the physical damage coverage is suspended for more than 10 days. A refund of premium, if applicable, shall be sent to the insured within 45 days after the effective date of the suspension.

 (c)  A reinstatement of physical damage coverage is effective only upon inspection and payment by the insured to the insurer of the adjusted premium for the physical damage coverage in full or in accordance with the insurer's normal payment plan. Such reinstatement is effective at the time of inspection.

 (8)(7)  The commission may, by rule, establish such procedures and notice requirements that it finds necessary to administer implement this section.

Section 2.  This act shall take effect October 1, 2006.

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SENATE SUMMARY

Deletes a provision exempting policies issued in certain counties from the requirement that a private passenger motor vehicle undergo a preinsurance inspection. Deletes a requirement that a physical imprint or other record be made of the vehicle identification number. Requires that a preinsurance inspection include certain color images of the vehicle. Requires that physical damage coverage be suspended if the preinsurance inspection is not completed within 10 business days. Requires an adjustment in the premium upon suspension of physical damage coverage.