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Texas Department of Insurance
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Commissioner’s Bulletin # B-0002-20

January 27, 2020

To:   All insurers writing personal automobile insurance in Texas

Re:   Temporary vehicle coverage provisions in HB 3420

Personal auto insurers will need to revise and file their policies to comply with the temporary vehicle coverage provisions in House Bill 3420, passed by the 2019 Texas Legislature. HB 3420 requires personal auto policies to provide primary liability coverage for temporary vehicles as defined in the bill.

What policies are affected? 
HB 3420 applies to personal automobile policies. 

What qualifies as a temporary vehicle? 
Personal auto policies must include the definition of temporary vehicle“ as given in Insurance Code Section 1952.060:

Temporary vehicle includes a vehicle that is loaned or provided to an insured by an automobile repair facility for the insured’s use while the insured’s vehicle is at the facility for service, repair, maintenance, or damage or to obtain an estimate and is: 

  • in the lawful possession of the insured or resident relative of the insured;
  • not owned by the insured, any resident relative of the insured, or any other person residing in the insured’s household; and 
  • operated by or in the possession of the insured or resident relative of the insured until the vehicle is returned to the repair facility.

Because the required definition of temporary vehicle includes the terms “repair facility” and “resident relative,” you may want to include the statutory definitions for those terms, found in Subsection 1952.060(a). 

What vehicles must be covered? 
Although coverage can always be broader, parameters for vehicles that are required to have temporary vehicle coverage are listed in Subsection 1952.060(c):  

  • private passenger auto; or 
  • a pickup, utility vehicle, or van with a gross vehicle weight of 14,000 pounds or less that is not used to deliver or transport goods, materials, or supplies, other than samples, unless: 
    • the delivery of the goods, materials, or supplies is not the primary use of the vehicle; or 
    • the vehicle is used for farming or ranching.

What coverage is affected? 
Subsections 1952.060(b) and (d) require primary, not excess, coverage for temporary vehicles in the liability section of the policy.  

Who must be covered? 
Subsection 1952.060(d) requires coverage for: 

  • the insured;
  • resident relative of the insured;
  • licensed household residents.

What must be covered? 
Subsections 1952.060(d) and (e) require coverage (up to policy limits) for the insured’s legal liability for bodily injury, property damage, and damage to the temporary vehicle. Insurance Code Section 1952.057 prohibits insurers from paying some insureds who were convicted on drug offenses. 

Is there an expedited form filing process? 
TDI is prioritizing approval of form filings that only make changes required by HB 3420. TDI expects insurers that have not already submitted filings to submit them quickly. Include this statement in the Filing Description field (under the General Information tab) in SERFF:  

 “We made this filing to comply with HB 3420. There are no other substantive changes.”  

How can I speed up the process? 
One possible way is to include this language for liability coverage: 

This policy provides primary liability coverage for temporary vehicles and insures: 

  • the person named in the policy, 
  • any resident relative of the insured, and 
  • any licensed operator residing in the household.

The liability coverage for temporary vehicles provides primary, not excess, coverage for the insured’s legal liability for:  

  • bodily injury;
  • property damage; and 
  • damage to the temporary vehicle.

Call the Property and Casualty Lines Office at 512-676-6710 or email with questions. 

For more information, contact:

Last updated: 1/27/2020