Louisiana Revised Statutes 6:969.26 – Property insurance
Terms Used In Louisiana Revised Statutes 6:969.26
- Consumer: means a natural person who enters into a consumer loan or consumer credit sale of a motor vehicle to be used primarily for personal, family, or household purposes. See Louisiana Revised Statutes 6:969.6
- Contract: A legal written agreement that becomes binding when signed.
- Contract: means the consumer's retail installment contract, note, agreement, or other evidence of indebtedness executed in connection with a motor vehicle credit transaction. See Louisiana Revised Statutes 6:969.6
- creditor: means a seller in a consumer credit sale, or a lender in a consumer loan. See Louisiana Revised Statutes 6:969.6
- GAP coverage: means a contract or insurance policy that covers a consumer's deficiency balance between the net payoff of the consumer's loan retail installment sales contract at the time of a loss and the amount paid by the consumer's primary insurance after a vehicle is deemed a total loss due to any direct or accidental physical damages or unrecovered theft which may be in the form of the following:
(a) Guaranteed auto protection offered by a property and casualty company licensed and regulated by the Department of Insurance. See Louisiana Revised Statutes 6:969.6
- Lender: means the originator of credit under a consumer loan, as well as any assignee or transferee of the consumer's contract. See Louisiana Revised Statutes 6:969.6
- Motor vehicle: means any new or used transportation device, including automobiles, motorcycles, trucks, and other vehicles that are operated over the public highways and the streets of this state, but does not include traction engines, boat trailers, road rollers, implements of husbandry, and other agricultural vehicles. See Louisiana Revised Statutes 6:969.6
- Motor vehicle credit transaction: means a consumer loan or a consumer credit sale involving a Louisiana consumer, or that is otherwise made subject to this Chapter. See Louisiana Revised Statutes 6:969.6
- Seller: means the seller of a motor vehicle, including the seller of a motor vehicle under a consumer credit sale, as well as any assignee or transferee of the consumer's contract. See Louisiana Revised Statutes 6:969.6
A. An extender of credit may, in addition, request or require a consumer to insure the secured motor vehicle and its use and operation, and any additional collateral securing the transaction, and include the cost of the insurance as a separate charge in the consumer’s contract. This insurance and the premiums or charges thereon shall bear a reasonable relationship to the amount, term, and conditions of credit, and to the existing hazards or risk of loss, damage, or destruction. This insurance and the premiums or charges thereon shall also bear a reasonable relationship to the value of the motor vehicle and other collateral insured or to be insured, when, in the event of loss, such insurance policy does not pay off the entire balance of the transaction.
B. When a consumer fails to maintain required property insurance or fails to provide the extender of credit with timely notice of the purchase or renewal of such insurance coverage, the extender of credit may, after notice to the consumer and expiration of a fifteen-day curative period from the mailing of said notice, purchase insurance on the customer’s property, including insurance protecting only the creditor‘s interest in such property. Such insurance premiums may be added to the outstanding balance of the customer’s contract and made subject to additional loan finance charges or credit service charges at the rate previously agreed to by the consumer.
C. Every seller or lender who obtains or provides insurance to a consumer to ensure a motor vehicle subject to a motor vehicle credit transaction shall inform the consumer in writing, at the time the seller or lender agrees to obtain or provide insurance, as to whether or not such insurance, by itself, satisfies the requirements of La. Rev. Stat. 32:851 et seq. When the insurance, by itself, does not satisfy the requirements of La. Rev. Stat. 32:851 et seq., the seller or lender shall advise the consumer that all motorists are required by law to be covered by an automobile liability policy with a legally prescribed liability limit which exceeds the liability limits of the policy provided, and further that failure to meet those limits will subject the consumer to penalties which may include the suspension or revocation of driving privileges.
D.(1) The seller shall and the lender may, in addition, offer the consumer the option of voluntarily purchasing gap coverage protecting the consumer from possible liability as a result of the consumer’s property insurance being insufficient to fully pay and satisfy the then unpaid balance under the consumer’s contract as a result of a total loss of vehicle. The cost of gap coverage may be financed under the transaction and made subject to loan finance charges or credit service charges, as applicable.
(2) Notwithstanding any other provision of law to the contrary, for purposes of this Subsection, a federally insured depository institution at all times, including during a repossession, shall be considered a lender.
Acts 1999, No. 794, §1, eff. July 2, 1999; Acts 2001, No. 1211, §1; Acts 2001, No. 1213, §1; Acts 2003, No. 415, §1.