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You are here: Home . rules . 2002 . 1211a-059
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EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE

CHAPTER 5, SUBCHAPTER L, ARTICLE 5.96 ADOPTION OF AMENDMENTS TO THE TEXAS AUTOMOBILE RULES AND RATING MANUAL, RULES 55 AND 71, AND ENDORSEMENTS 583C, 593D, TE 00 40A, TE 23 20D, AND TE 99 17G

The Commissioner of Insurance is adopting amendments proposed by Staff to the Texas Automobile Rules and Rating Manual (the Manual), Rules 55 and 71, and Endorsements 583C, 593D, TE 00 40A, TE 23 20D, and TE 99 17G, as well as Endorsements 593D and TE 00 40A in the Texas Standard Provisions for Automobile Policies (the Standard Provisions). The purpose of these amendments is to expand eligibility for personal auto coverage to certain utility vehicles that are currently ineligible because of their gross vehicle weight (G.V.W.). Staff's petition (Ref. A-1002-39-I) was published in the November 8, 2002 issue of the Texas Register (27 TexReg 10619).

Today's action amends the Manual´s Rules 55 (Eligibility), and 71 (Definitions); Endorsement 583C (to be redesignated 583D), Miscellaneous Type Vehicle Endorsement; Endorsement 593D (to be redesignated 593E), Texas Personal Auto Policy ­ Amendatory Endorsement; Endorsement TE 00 40A (to be redesignated TE 00 40B), Amendatory Endorsement ­ Texas; Endorsement TE 23 20D (to be redesignated TE 23 20E), Truckers Endorsement; and Endorsement TE 99 17G (to be redesignated TE 99 17H), Individual Named Insured; as well as Endorsement 593D (to be redesignated 593E) and Endorsement TE 00 40A (to be redesignated TE 00 40B) in the Standard Provisions. The only substantive change expands eligibility for personal auto coverage to certain utility vehicles that exceed the G.V.W. limitations, which are currently 10,000 pounds or less. The expanded eligibility standard for personal auto coverage for certain utility vehicles is 25,000 pounds or less. The only other changes are editorial, and they make Rules 55 and 71 consistent with each other, as well as making the endorsements and policy forms more consistent with each other.

Rule 55 currently contains a note at the end that reads:

Note: Utility type means vehicles (with a G.V.W. of 10,000 lbs. or less) of the pickup body, sedan delivery, panel truck, van type and multi-use type which includes Jeeps, Blazers, Rancheros, Broncos, and other similar type vehicles.

As amended, the note in Rule 55 will read:

Note: Utility type means vehicles (with a G.V.W. of 25,000 lbs. or less) of the pickup body, sedan delivery, panel truck, van type and multi-use type which includes, Jeeps, Blazers, Rancheros, Broncos, and other similar vehicles.

Rule 71.A.2. currently provides:

2.A motor vehicle that is a utility type vehicle shall be considered a private passenger auto, if it is:

owned or leased under written contract for a continuous period of at least six months;

by an individual, or by two or more individuals who are residents of the same household, or

by two or more individuals who are not residents of the same household, but are related by blood, marriage or adoption, including a ward or foster child; and

not used for the delivery or transportation of goods, materials or supplies other than samples, unless;

the delivery of goods, materials or supplies is not the primary usage of the vehicle.for farming or ranching.

Utility type means vehicles (with a G.V.W. of 10,000 lbs. or less) of the pickup body, sedan delivery, panel truck, van type and multi-use type which includes Jeeps, Blazers, Rancheros, Broncos and other similar vehicles.

As amended, the last paragraph of Rule 71.A.2. will provide:

Utility type means vehicles (with a G.V.W. of 25,000 lbs. or less) of the pickup body, sedan delivery, panel truck, van type and multi-use type which includes Jeeps, Blazers, Rancheros, Broncos and other similar vehicles.

Endorsement 583C, Section I, in a portion of the definition of "your covered auto," Subsection 2.b. currently reads:

a pickup, panel truck or van with a G.V.W. of 10,000 lbs. or less not used for the delivery or transportation of goods, materials or supplies other than samples; unless, (1) the delivery of goods, materials or supplies is not the primary usage of the vehicle, (2) used for farming or ranching.

As amended, that portion of the definition in Endorsement 583D will read:

a utility type vehicle, with a G.V.W. of 25,000 lbs. or less, of the pickup body, sedan delivery, panel truck, van type and multi-use type, not used for the delivery or transportation of goods, materials or supplies other than samples; unless, (1) the delivery of goods, materials or supplies is not the primary usage of the vehicle, or (2) used for farming or ranching.

The Texas Personal Auto Policy, in a portion of the definition of "your covered auto," Section G.2.I.b. currently reads:

b. a pickup or van with a G.V.W. of 10,000 lbs. or less not used for the delivery or transportation of goods, materials or supplies other than samples; unless, (1) the delivery of goods, materials or supplies is not the primary usage of the vehicle, or (2) used for farming or ranching.

Today's action amends that portion of the policy´s definition by replacing Endorsement 593D with Endorsement 593E, which will contain a new Section 5, providing:

5. DEFINITIONS ­ G.2 I. b. ­ is amended as follows:

b. a utility type vehicle, with a G.V.W. of 25,000 lbs. or less, of the pickup body, sedan delivery, panel truck, van type and multi-use type, not used for the delivery or transportation of goods, materials or supplies other than samples; unless, (1) the delivery of goods, materials or supplies is not the primary usage of the vehicle, or (2) used for farming or ranching.

The Truckers Coverage Form in Section VI­ Definitions, Section H, contains the following definition:

H. Private passenger type means a private passenger auto or station wagon, and also includes a pickup or van with a G.V.W. of 10,000 lbs. or less not used for the delivery of transportation of goods, materials or supplies other than samples; unless, (1) the delivery of goods, materials or supplies is not the primary usage of the vehicle, or (2) used for farming or ranching.

Today's action amends that definition in the Truckers Coverage Form by replacing Endorsement TE 00 40A with Endorsement TE 00 40B, which will have a new section at the end, providing:

CHANGE IN DEFINITION

TRUCKERS COVERAGE FORM ­ SECTION VI.H.is amended as follows:

H. Private passenger type means a private passenger auto or station wagon, and also includes a utility type vehicle, with a G.V.W. of 25,000 lbs. or less, of the pickup body, sedan delivery, panel truck, van type and multi-use type, not used for the delivery or transportation of goods, materials or supplies other than samples; unless, (1) the delivery of goods, materials or supplies is not the primary usage of the vehicle, or (2) used for farming or ranching.

Endorsement TE 23 20D in Section E.2.a. currently contains the following definition:

"Private passenger type" means a private passenger auto or station wagon, and also includes a pickup, panel truck or van with a G.V.W. of 10,000 lbs. or less not used for the delivery or transportation of goods, materials or supplies other than samples; unless (1) the delivery of goods, materials or supplies is not the primary usage of the vehicle, or (2) used for farming or ranching.

Today's action amends the definition through Endorsement TE 23 20E, which will read:

"Private passenger type" means a private passenger auto or station wagon, and also includes a utility type vehicle, with a G.V.W. of 25,000 lbs. or less, of the pickup body, sedan delivery, panel truck, van type and multi-use type, not used for the delivery or transportation of goods, materials or supplies other than samples; unless, (1) the delivery of goods, materials or supplies is not the primary usage of the vehicle, or (2) used for farming or ranching.

Endorsement TE 99 17G in Section A.2.c. currently reads:

"Utility type auto" means vehicles of the pickup body, sedan delivery or van type with a G.V.W. of 10,000 lbs. or less and multi-use type vehicles not used for the delivery or transportation of goods, materials or supplies other than samples; unless, (1) the delivery of goods, materials or supplies is not the primary usage of the vehicle, or (2) used for farming or ranching.

Today's action changes that definition through Endorsement TE 99 17H to read:

"Utility type auto" means a utility type vehicle, with a G.V.W. of 25,000 lbs. or less, of the pickup body, sedan delivery, panel truck, van type and multi-use type, not used for the delivery or transportation of goods, materials or supplies other than samples; unless, (1) the delivery of goods, materials or supplies is not the primary usage of the vehicle, or (2) used for farming or ranching.

As previously mentioned, "G.V.W." stands for gross vehicle weight. That term, as defined in the Manual by Rule 57.B.1.a., means "The maximum loaded weight for which a single automobile is designed, as specified by the manufacturer." When the 10,000 pound G.V.W. limitation was established for a utility vehicle´s eligibility for personal auto coverage in 1990 (Board Order No. 55717, effective May 1, 1990) there were no utility vehicles with such a high G.V.W. However, manufacturers in recent years have manufactured utility vehicles that exceed the 10,000 pound G.V.W. standard, and that could otherwise be "considered"private passenger autos under Manual rules under certain conditions. As a result many such vehicles, (even those not used in business) are ineligible for personal auto coverage.

An insured who owns one of these vehicles must pay a higher premium for a Business Auto Coverage Form than for a Personal Auto Policy. Further, such an insured does not get certain discounts that might otherwise apply under a Personal Auto Policy. By raising the G.V.W. limitation to 25,000 pounds for otherwise qualified utility vehicles not used in business, today's action will achieve more fairness in rating these vehicles.

Additional support for today's action is found in Insurance Code Article 5.01C, which became effective September 1, 2001, and pertains to short-term liability insurance for nonresidents visiting this state. This article defines "motor vehicle" to mean "any private passenger vehicle or utility type vehicle that has a gross weight of 25,000 pounds or less."

The Commissioner of Insurance has jurisdiction over this matter pursuant to Insurance Code Articles 5.06, 5.10, 5.96, 5.98, and 5.101.

This notification is made pursuant to Insurance Code Article 5.96, which exempts it from the requirements of the Government Code, Chapter 2001 (Administrative Procedure Act).

Consistent with Insurance Code Article 5.96(h), the Department will notify all insurers writing automobile insurance of this adoption by letter summarizing the Commissioner's action.

IT IS THEREFORE THE ORDER of the Commissioner of Insurance that the Manual is amended as described herein, and the amendments are adopted to become effective on the 60 th day after publication of the notification of the Commissioner´s action in the Texas Register. All applicable policies that become effective on and after 12:01 a.m. on this order's effective date must be endorsed by the revised endorsement forms described herein.



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