Bill
AB 646
Expands and limits vehicle protection warranties to cover anti-theft devices for catalytic converters, capping benefits to actual converter costs and related expenses.
Status and timeline
- Introduced: February 13, 2025 (read first time).
- Latest status: In committee; held under submission (May 23, 2025).
- Committee activity: Referred to Assembly Insurance (Mar 3); amended and re‑referred; Assembly Insurance voted do pass and re‑referred to Appropriations (Apr 30); set for first hearing and placed on Appropriations suspense file (May 14); held under submission (May 23).
- Amends: Insurance Code Section 116.6. Fiscal committee: Yes. Appropriation: No. Vote: Majority.
Purpose
- Clarify and limit the treatment and benefit scope of warranties sold for vehicle protection products that are intended to deter theft of vehicles or of attached catalytic converters; expand the statutory definition of “vehicle protection product” to expressly cover devices, systems, or services aimed at preventing catalytic converter theft; and require specified disclosures when catalytic converter marking products are sold.
Key provisions and changes
- Definition expansion: Adds to the statutory definition of “vehicle protection product” devices, systems, or services installed/applied to deter theft of a vehicle or a catalytic converter attached to a vehicle. This explicitly includes physical anti‑theft devices aimed at catalytic converters and body‑part marking products that permanently mark converters.
- Benefit limits:
- If a warranty covers only the vehicle’s catalytic converter, the warranty benefit is limited to the actual cost of replacing the catalytic converter.
- For the vehicle protection product described in the bill (anti‑catalytic‑converter products), benefits are limited to the actual cash value and replacement cost of the catalytic converter, temporary vehicle rental expenses, and reimbursement for the insurance policy deductible.
- Payable event clarified: The warranty benefit is payable upon theft of the vehicle or the theft (or unauthorized removal) of the catalytic converter attached to the vehicle, as defined in the warranty.
- Warrantor and insurance requirements (existing provisions retained and clarified):
- Warrantor must maintain an insurance policy with an admitted insurer covering 100% of the warrantor’s obligations under the warranty.
- Warrantyholder may make a direct claim against the insurer if the warrantor fails to pay a covered claim within 60 days after a complete proof‑of‑loss.
- Warrantor must file the insurer policy with the Insurance Commissioner; insurer cancellation notices and other procedural protections are specified.
- Warranties must be written and include specified disclosures and 10‑point type statements that the agreement is a warranty (not insurance) and the warrantyholder must have comprehensive insurance to be eligible.
Seller disclosure
- If the vehicle protection product is a body‑part marking product intended to permanently mark the catalytic converter, the seller must provide a specified notice to the purchaser (text of notice specified in the bill).
Who is affected
- Consumers/vehicle owners: Changes limit the benefit available under converter‑specific warranties and clarify when benefits are payable; require clearer disclosures.
- Warrantors/sellers of vehicle protection products (including body‑part marking and catalytic converter anti‑theft devices): Must comply with the revised benefit limits, disclosure rules, insurance coverage and filing requirements.
- Insurers: Required to underwrite policies that fully cover warrantors’ obligations and permit direct claims by warrantyholders in specified circumstances.
- Dealers/retail sellers: Additional disclosure obligations when selling marking products.
Potential impact
- Consumer protection: Clarifies coverage scope and imposes disclosure requirements so buyers better understand warranty limits related to catalytic converter theft.
- Market effects: May reduce the potential payout exposure for certain warranties (by limiting coverage to actual replacement cost of converters) and could influence the pricing or availability of converter‑protection warranties and products.
- Administrative: Maintains oversight role for the Insurance Commissioner through policy filings and procedural filing/cancellation rules.
Text reference
- Amends Insurance Code § 116.6 to implement the above changes.
Compiled from official sources — confirm details with the bill’s official record.
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