§ 42-21-102 — Requirements for offering vehicle value protection agreements

(1) A provider shall not offer a vehicle value protection agreement unless the
agreement meets the requirements of this article 21. A provider shall not condition
the extension of credit, the terms of credit, or the terms of the related vehicle sale
or lease upon the purchase of a vehicle value protection agreement.

(2) To comply with this section, a vehicle value protection agreement must:

(a) Provide a benefit to the contract holder upon the trade-in, total loss, or
unrecovered theft of a covered vehicle. The benefit may be:

(I) A credit toward the purchase or lease of a subsequent or replacement
vehicle; or

(II) An amount applied to the cash value of the covered vehicle at the time of
trade-in.

(b) Identify, in the contract, the administrator or provider, the dealer, the
contract holder, and the terms of the sale;

(c) (I) Guarantee the provider's obligations by an insurance policy that
complies with section 42-21-105; and

(II) Conspicuously state that the provider's obligations are guaranteed by an
insurance policy, issued by an insurer, that pays the contract holder if the provider
fails to perform its obligations under the vehicle value protection agreement;

(d) Outline the terms, including the purchase price of the covered vehicle
and any eligibility requirements, conditions of coverage, or exclusions, of the
vehicle value protection agreement;

(e) Notify the contract holder of the following:

(I) Whether the vehicle value protection agreement is cancellable and the
procedures for requesting any refund of the unearned purchase price of the
agreement paid by the contract holder;

(II) The methodology for calculating any refund of the unearned purchase
price of the vehicle value protection agreement after the agreement is canceled;

(III) Any procedures the contract holder must follow to obtain a benefit under
the terms and conditions of the vehicle value protection agreement and, if
applicable, a telephone number, website, and address where the contract holder
may apply for a benefit; and

(IV) That neither the extension of credit, the terms of credit, nor the terms of
the related vehicle sale or lease may be conditioned upon the purchase of the
vehicle value protection agreement; and

(f) State the terms, restrictions, and conditions governing cancellation of the
vehicle value protection agreement prior to the termination date of the agreement
by either the provider or the contract holder.

Legislative History

Source: L. 2023: Entire article added, (SB 23-015), ch. 36, p. 128, � 1, effective August 7.