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Committee advances bill to let companies sell ‘vehicle value protection’ agreements with consumer safeguards
Summary
Lawmakers advanced HB 187 to authorize optional vehicle value protection agreements that protect consumers’ equity in a vehicle; the bill prescribes disclosures, a 30-day free-look and financial‑responsibility standards and passed a committee substitute on a close voice vote.
The Senate Regulated Industries and Utilities Committee voted to advance House Bill 187, which would authorize vehicle value protection agreements (VVPAs) and set consumer-protection rules for them.
Representative Mark Mahan, the bill’s sponsor, told the committee these agreements are optional contracts that protect a buyer’s equity in a vehicle after an adverse event and are distinct from traditional gap insurance, which protects a lender’s exposure on an outstanding loan. “A VVPA helps a consumer protect the equity that they have in a vehicle in the event of a sudden or unexpected loss of value or use of the vehicle,” Mahan said.
Under the proposal, each agreement must include conspicuous disclosures of provider and administrator contact information, charges, eligibility requirements, claims procedures and refund methods; the bill guarantees a 30‑day free‑look cancellation and permits limited administrative cancellation fees. It also requires providers to either back agreements with an insurer that meets capital requirements, maintain a funded reserve equal to at least 40% of collected fees, or hold at least $100 million net worth, and places enforcement with the Office of Consumer Protection.
Travis Moore, general counsel for the Guaranteed Asset Protection Alliance, testified the measure is based on model legislation and that several states already have statutory frameworks permitting similar products. “Currently, Alabama, Colorado, Florida, Missouri, North Carolina, Ohio, Oklahoma, Texas, and Utah all have statutory frameworks for offering these types of vehicle value protection agreements,” Moore said, describing the bill as clarifying the legal status that otherwise deters reputable providers from selling across states.
Committee members asked about fraud risks, pricing and whether the bill favors particular vendors; the sponsor and the trade representative said the bill is intentionally nonexclusive and creates uniform rules to let reputable providers operate and to keep fly‑by‑night actors out of the market.
The committee recorded a close voice vote on a motion to pass the substitute; the clerk recorded five votes in favor and four opposed and the substitute was advanced to rules.
What’s next: HB 187 will move to the rules committee; sponsors said they will continue to engage with consumer advocates and industry representatives on implementation details.
