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Bill Summary · HB 347

Summary — HB 347: Credit Property Insurance Restrictions

Status: Serial Referral to Finance — Stricken
Introduced: Nov. 12, 2024
Primary subject areas: Insurance; Motor vehicle insurance; Consumer protections

Main purpose

The bill prohibits certain automobile physical-damage coverages from being included in credit property insurance (often sold or placed by creditors/lenders in connection with vehicle-secured loans). It is a consumer‑protection measure intended to limit the types of add‑on vehicle coverages that can be packaged into a loan’s credit property insurance.

Key provisions

  • Amends G.S. 58‑57‑100 (Credit property insurance; automobile physical damage insurance) to specify that automobile physical damage coverage included in credit property insurance shall not include:
    1. Coverage for the cost of repossession.
    2. Skip, confiscation, and conversion coverage (coverage triggered when a borrower has sold, traded, disposed of the collateral, or both borrower and collateral cannot be found).
    3. Coverage that requires the borrower’s insurance deductible to be less than $250.
    4. Coverage that is broader than the insurance coverages that satisfy the minimum insurance requirements set forth in subsection (a) of G.S. 58‑57‑100.
  • Clarifies that nothing in the prohibition prevents the issuance of a separate policy or endorsement providing the excluded coverages — provided no charge for those coverages is passed on to the borrower.

Who is affected

  • Borrowers/vehicle owners: limits the types of involuntary or lender‑imposed coverages that can be included in credit/forced placement policies, preserving borrower costs and insurance terms.
  • Creditors and lenders that place credit property insurance on collateral: restricts which coverages may be bundled into such policies.
  • Insurers and producers who underwrite or sell credit property insurance: must refrain from including the excluded coverages in credit property policies subject to this statute; may offer them only as separate, no‑charge endorsements to borrowers.
  • Repossession/asset recovery service providers: affected indirectly because coverage for repossession costs and skip/confiscation cannot be included in credit property policies.

Effective date / timeline

  • The act is effective upon becoming law and applies to contracts issued, renewed, or amended on or after that date.

Practical impact

  • Prevents lenders from including certain add‑on vehicle coverages (repossession costs, skip/confiscation/conversion, low deductible requirements, and coverages broader than state minimums) within credit property insurance that is charged to borrowers.
  • Preserves insurers’ ability to provide such coverages separately only if the borrower is not charged for them.
  • Administrative impact on insurers and creditor‑placed policy practices is expected to be operational (policy design, disclosures) rather than fiscal.

(Note: legislative procedural history in the materials shows referral to insurance‑related committees and subsequent referral to finance; the status header indicates the bill was stricken from a serial referral to Finance.)

Compiled from official sources — confirm details with the bill’s official record.

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