AN ACT to amend Tennessee Code Annotated, Title 47; Title 55 and Title 56, relative to vehicle value protection agreements.
HB2231 creates the “Tennessee Vehicle Value Protection Product Act” and establishes a new regulatory framework for vehicle value protection agreements. These agreements are contracts offered by a provider, often through a dealer, that promise a benefit if a covered vehicle is traded in, totaled, stolen and unrecovered, or otherwise loses value due to an adverse event reflected on a vehicle history report. The bill also covers related loyalty benefits and replacement-vehicle benefits tied to a trade-in, total loss, or theft event.
The bill sets out detailed requirements for what these agreements must include, such as disclosures, cancellation terms, refund rules, and identification of the provider, administrator, dealer, and contract holder. It prohibits conditioning vehicle financing, leasing, or sale terms on the purchase of the product. Providers must back their obligations with contractual liability insurance, and consumers may seek payment directly from the insurer if the provider does not pay within 60 days after proof of loss or trade-in. Agreements that comply with the act are expressly excluded from regulation as insurance, and the Department of Commerce and Insurance is directed to adopt implementing rules.
The bill would amend Tennessee Code Annotated Title 56 by replacing Chapter 55 with a new chapter governing vehicle value protection products, while also affecting related provisions in Titles 47 and 55 by defining the product’s relationship to vehicle sales, leases, and finance agreements. It creates a statutory safe harbor for these agreements, classifies them as not insurance if they comply with the chapter, and authorizes rulemaking by the commissioner of commerce and insurance to address disclosures, recordkeeping, fees, penalties, complaints, and underwriting-related issues. The act applies prospectively to agreements entered into, renewed, or amended on or after July 1, 2026.
Based on the bill text and the absence of recorded committee debate or votes in the provided materials, the overall sentiment appears procedural and regulatory rather than controversial. The measure is framed as a consumer-protection and market-clarification bill, aiming to define permissible product terms and establish oversight. No opposing or supporting arguments are documented in the supplied context, so no clear partisan or stakeholder split can be inferred from the record provided.
The main potential points of contention are the bill’s treatment of vehicle value protection agreements as non-insurance products and the extent of regulatory authority given to the Department of Commerce and Insurance. Consumer advocates could focus on whether the disclosures, cancellation rights, and refund provisions are sufficient, while dealers, providers, and insurers may care about the insurance-backstop requirement, administrative fees, and rulemaking standards. Another possible issue is the prohibition on tying the product to credit or sale terms, which limits dealer and lender practices.