UPDATE: Legislation filed in Louisiana expanding the kinds of contracts that can be offered by vehicle mechanical breakdown insurers was effective June 9, 2010. Under the prior law, such insurers could only offer mechanical breakdown insurance policies limited to coverage for the mechanical breakdown or failure of a motor vehicle and related roadside assistance kinds of benefits. House Bill 581 establishes a new kind of contract, known as a vehicle component coverage contract, and authorizes the same licensed insurers to provide paintless dent removal coverage, tire & wheel coverage and windshield coverage. A restriction that would have permitted these kinds of coverages to be sold only in conjunction with the purchase of a motor vehicle or the purchase of one or more tire or wheels of a motor vehicle, was amended out of the bill prior to passage. Thus, these new vehicle component coveage contracts may be sold whether or not there is an associated motor vehicle or tire/wheel sales transaction. Addtionally, new language was introduced to a later version of the bill which creates an exception from licensure, as a vehicle mechanical breakdown insurer, for any tire and wheel coverage that is sold as part of a “service package” in connection with the sale of one or more tires or wheels.
