House Bill 347 amends North Carolina’s credit property insurance statute to narrow what may be included in automobile physical damage insurance sold in connection with a credit property insurance policy. The bill specifically prohibits that coverage from including repossession costs, skip/confiscation/conversion coverage, deductibles below $250, or coverage broader than the minimum auto physical damage insurance requirements already set in law. It also clarifies that insurers may still offer those additional coverages in a separate policy or endorsement, as long as the borrower is not charged for them through the credit property policy.
The bill is effective when it becomes law and applies prospectively to contracts issued, renewed, or amended on or after that date. In practical terms, it would change the permissible contents of credit property insurance products offered in North Carolina and would require insurers and lenders to adjust policy forms and contract terms to comply with the new limits.
HB347 would revise G.S. 58-57-100, the statute governing credit property insurance and automobile physical damage insurance, by removing certain optional or expanded coverages from the package that can be embedded in a credit property insurance policy. The measure would affect insurers, lenders, and borrowers using credit-related auto physical damage coverage by limiting what can be charged within that product and by preserving only separately issued, separately priced endorsements or policies for the excluded coverages. It would apply only to new, renewed, or amended contracts after enactment, so existing contracts would not be immediately altered.
The available context suggests the bill is generally technical and regulatory in nature, with no recorded committee debate or votes indicating strong opposition or controversy. The caption notes that it was recommended by the Department of Insurance, which suggests agency support or at least agency-driven drafting. The lack of recorded votes or transcript discussion points to a relatively low-profile bill focused on insurance product standardization rather than a broader policy dispute.
The main substantive issue is whether credit property insurance should be allowed to bundle broader automobile physical damage protections, including repossession-related and skip/confiscation/conversion coverage, into the base policy. Consumer and borrower advocates could view the bill as limiting potentially useful protections, while insurers and regulators may see it as preventing overbroad or improperly bundled coverage and ensuring clearer pricing. The bill resolves that tension by allowing the excluded coverages to be sold separately, but only without passing the cost to the borrower through the credit property policy.