The Commissioner of Insurance, by Commissioner´s Order No. 98-1273, Docket No. 2376, has adopted amendments to the Texas Automobile Rules and Rating Manual (the Manual), Rules 55, 71, 72, 74, and 75, concerning eligibility of certain individuals for personal auto coverage and the Texas Driving Insurance Plan. The most extensive changes are to Manual Rule 72 (Personal Auto Policy and Coverage-Eligibility). These amendments expand the list of persons eligible for personal auto coverage. Instead of the current requirement that a jointly owned auto be owned by a husband and wife, these amendments allow personal auto coverage for an auto or autos jointly owned by two or more individuals who are residents of the same household (amended Rules 71, 72, and 74). Additionally, under amended Rule 72, Section E, personal auto coverage may be written for joint named insureds who are related by blood, marriage or adoption, and who are not residents of the same household, even if they do not jointly own the auto(s) if:
- the auto is owned by one or more of the joint named insureds who are residents of the household address shown in the policy, and
- the joint named insured who is a resident of a different household is the primary operator of the auto.
Pursuant to amended Rule 72.A., certain types of vehicles may be afforded personal auto coverage if they meet the current requirement of being written on a specified auto basis, plus the new standard of being owned jointly by two or more individuals (not necessarily husband and wife) who are residents of the same household. A similar change is adopted for miscellaneous type vehicles under Rule 72.B.
Rule 71 (Definitions) is amended in its definition of a utility type vehicle to be considered a private passenger auto. New wording for Rule 71.2.a. is as follows:
(1) by an individual, or by two or more individuals who are residents of the same household, or
(2) 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...."
In Rule 74 (Private Passenger Auto Classifications) Section A (Private passenger autos) is amended by replacing the first two phrases with the following language:
owned jointly by two or more individuals who are not residents of the same household address shown in the policy, but are related by blood, marriage or adoption, including a ward or foster child;...."
The amendment of this rule also eliminates the following wording under Section A.5. (which language will no longer be accurate): "*Not eligible for coverage under a Personal Auto Policy."
Because Rules 71, 72, and 74 are amended, Rule 55 (Eligibility) and Rule 75 (Texas Driving Insurance Plan) are also amended in order for their eligibility provisions to be compatible with those first three rules. Rule 55.D.1. and E.1., and Rule 75.B.2. are amended by deleting "owned by an individual or husband and wife who are residents of the same household…." The Rule 55 wording is replaced with the following: "described in Rule 71…." and the Rule 75 wording with the following: "described in Rules 71, 72, and 74…."
The other amendments necessitate adding a definition of "Applicant" to Rule 75. This definition consists of a new Section C.1. (with remaining subsections of Section C. to be renumbered), reading as follows:
- "Applicant," as used in this rule, means each person shown as a named insured on the Declarations page of the policy, unless such person becomes expressly excluded from the policy.
The amendments were adopted to become effective February 1, 1999.
David P. Durden
Deputy Commissioner
Automobile And Homeowners Division