A New Law Will Change How Louisiana Provides Auto Coverage

A new Louisiana law affects the automotive industry. Formerly known as bill 522, this newly made law will change the way automotive business is done in Louisiana. It elaborates on the wording regarding motor vehicle service contracts, and includes “the repair of chips or cracks in or the replacement of motor vehicle windshields as a result of damage caused by road hazards.” The law also eliminates a portion of the vehicle mechanical breakdown insurance policy. The section referencing warranty and vehicle service agreements with assumption of risk has been re-worded in hopes to have a better understanding for companies and customers.

The motor vehicle contract providers segment was added and can be found in chapter 58. It goes into topics including: warranties, exemptions, newly-defined services and different types of contracts. The law suggests several reasons for this addition, which center around encouraging fair competition among different systems, creating a registration and assurance apparatus for vehicle contract providers and to encourage innovation.

Another featured section with changes involves requirements for doing business within Louisiana. It states service contracts will not be issued, offered for sale or sold if specific steps aren’t followed. Those featured steps include giving a copy of the service agreement to the service contract holder, being registered and in good standing with the state and giving a receipt for proof of purchase to the contract holder. These steps are in place to ensure communication is had between all parties involved to help prevent fraudulent activity in regards to service contracts.

The law was passed by the House on April 5. The Senate passed the amended law on May 9 and the House voted to concur on May 17. It was sent to the governor for executive approval and was signed on May 28. All changes will take effect on February 1, 2019. Click here to see the full text on the Louisiana law.

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