Texas Senate passes bill to extend loss damage waivers

SB 1778 by Sen. Angela Paxton (R-McKinney) would give consumers another option to protect themselves from damage to a leased vehicle. Currently, when a person leases a motor vehicle, he or she is liable for excess loss, which can be large dents, scratches, or stains or tears in upholstery that are beyond those normally found in a car that has been used for a lease period. Consumers often face these charges when lease periods are completed, thereby exposing consumers to charges after the vehicle has been returned.

While the Business and Commerce Code contains provisions for loss damage waivers for short-term rental cars, heavy equipment, and other goods that are available for rent, it does not have a provision for excess loss damage waivers for leased motor vehicles.

SB 1778 allows a consumer to purchase an excess loss damage waiver when the vehicle is leased to cover the excess wear and use of the leased vehicle and thereby avoid most charges when a lease period is completed. SB 1778 also clarifies that the excess wear and use waiver is not an insurance product.

The bill passed the Senate on a unanimous vote and moves to the House for consideration.

Contact Jeff Huffman at 469-385-6488 or jhuffman@txcua.coop for more information.