Committee advances bill to allow regulated vehicle value protection agreements

House Bill 504, LC 394621, which would authorize and set consumer-protection rules for vehicle value protection agreements, was presented to a Georgia House subcommittee and received a committee motion to pass after extended questions from members. The presenter described the measure as a way to give car buyers a voluntary tool to cover unrecovered vehicle value at time of loss, theft or depreciation.

“I wanna thank you for the opportunity to present to you House Bill 504. That's LC 39 46 21,” the bill sponsor said, introducing the proposal as “a step towards ensuring consumer protection and market competitiveness in Georgia's automotive industry.” The bill, as explained to the panel, would define vehicle value protection agreements (VVPAs) as optional contracts offered by dealers and financial institutions and would require clear disclosures, provider financial security, cancellation rights and state oversight including enforcement by the attorney general.

Supporters and industry witnesses said the product is distinct from traditional gap insurance — which covers outstanding loan balances — because VVPAs target unrecovered vehicle value that can leave buyers, especially cash purchasers and those who make large down payments, exposed after a total loss or diminished-value event. A product representative said a common product offers a $10,000 depreciation benefit for up to 60 months and that dealer cost for that product is “usually about a thousand dollars.”

Committee members pressed on several consumer-protection details. Members asked where the bill establishes the 30-day “free look” cancellation period; the sponsor pointed to lines in the draft that require the free-look period be “at least 30 days” and acknowledged a drafting suggestion to move that requirement into the definition for clarity. Members also questioned whether providers could cancel coverage after paying a claim, how multiple covered vehicles would be treated, and whether the product could be marketed in ways that shift costs away from other insurers.

Several members raised concerns about possible bad actors in the market. One member described prior experiences with companies that canceled customers after paying claims and asked what protections the bill provides against that practice. The sponsor and industry witnesses said the bill includes disclosure, refund and oversight requirements and said the attorney general would have enforcement authority.

After members' questions and discussion, Representative Fordell Washburn moved the bill. The motion was seconded and the committee conducted a voice vote. The chair ruled the motion passed by voice vote; there was no roll-call tally recorded in the transcript.

Why it matters: supporters said passing HB 504 would let Georgia consumers buy protection products allowed in neighboring states and provide statutory safeguards for how those products are sold and administered. Critics warned the products may be structured so that consumers receive benefits only if they replace the vehicle through a dealer — a design some members said could disadvantage lower-income consumers or create incentives for dealers’ marketing practices.

What’s next: committee members directed sponsors and staff to continue drafting and to answer drafting and scope questions. The committee recorded a motion to pass the bill; the chair declared it passed on a voice vote.