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As Passed by the Senate
136th
General Assembly
Regular
Session
Sub. S. B. No. 65
2025-2026
Senator Lang
Cosponsors: Senators Cirino,
DeMora, Hicks-Hudson, Ingram, Johnson, O'Brien, Patton, Reineke,
Reynolds, Roegner, Schaffer, Weinstein
To
amend sections 1317.05, 3905.426, 4509.06,
and
4509.70 and to enact
section
1310.251
of the Revised Code
to
modify the law governing ancillary product protection contracts,
vehicle value protection agreements, and uninsured drivers.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section
1.
That
sections 1317.05, 3905.426, 4509.06,
and
4509.70 be amended and
section
1310.251
of the Revised Code be enacted to read as follows:
Sec.
1310.251.
(A)(1)
As used in this section, "excess wear and use waiver" means
a contractual agreement that is part of, or a separate addendum to, a
lease agreement for use of a motor vehicle, under which the lessor
agrees, with or without a separate charge, to do one or both of the
following:
(a)
Cancel or waive all or part of amounts that may become due under a
lessee's lease agreement as a result of excess wear and use of a
motor vehicle;
(b)
Cancel or waive amounts due for excess mileage.
(2)
"Motor vehicle" has the same meaning as in section 4501.01
of the Revised Code and also includes utility vehicles and
under-speed vehicles as defined in that section.
(B)
The terms of a related motor vehicle lease shall not be conditioned
upon the consumer's payment for any excess wear and use waiver.
Excess wear and use waivers may be discounted or given at no extra
charge in connection with the purchase of other noncredit related
goods or services.
(C)
Notwithstanding any provision of the Revised Code to the contrary, an
excess wear and use waiver is not an insurance product.
Sec.
1317.05.
(A)
Any retail seller who, in any retail installment contract, has agreed
to purchase insurance for the retail buyer and to extend credit for
the price thereof, excluding single interest insurance, shall, prior
to the due date of the first installment of the retail installment
contract, deliver to the retail buyer personally, or mail or cause to
be mailed to the retail buyer at the retail buyer's address as shown
on the retail installment contract, the policy of insurance, or in
lieu thereof a certificate of insurance, or the retail buyer is not
liable on the retail buyer's retail installment contract until the
policy, or certificate of insurance, is received, or full refund is
made of the insurance premium.
If
the premium for insurance of like kind and amount, as fixed in the
published manual of a recognized standard rating bureau designated by
the retail seller, is less than the amount charged the retail buyer
as fixed in the written instrument in compliance with division (D) of
section 1317.04 of the Revised Code, the retail buyer may deduct an
amount equal to three times the difference from the amount owed the
retail seller, or the retail seller's successor in interest. Sections
1317.01 to 1317.11 of the Revised Code do not impair the authority of
the superintendent of insurance to grant, renew, or revoke licenses,
nor do said sections authorize anyone other than a licensee of the
division of insurance to directly or indirectly receive any part of
the amount charged for insurance in connection with any retail
installment sale.
(B)
As used in this division, "debt cancellation or debt suspension
product" means a contractual agreement in which a retail seller,
or its assignee, agrees for a separate charge to cancel or waive all
or a part of amounts due on a retail buyer's retail installment
contract in the event of a total physical damage loss or unrecovered
theft of the motor vehicle that is the subject of the contract. "Debt
cancellation or debt suspension product" includes a guaranteed
asset protection waiver, guaranteed auto protection waiver, or other
similarly named agreement.
A "debt cancellation or debt suspension product" may also
provide, with or without a separate charge, a benefit that waives an
amount, or provides a borrower with a credit, towards the purchase of
a replacement motor vehicle.
A
debt cancellation or debt suspension product, and an addendum to a
retail installment contract containing a debt cancellation or debt
suspension product, shall be considered a part of the retail
installment contract and shall remain a part of that contract upon
the assignment, sale, or transfer of that contract. The charge for
any
optional
debt
cancellation or debt suspension product shall be listed as a specific
good
and shall not be considered a finance charge or interest
.
The purchase price and the terms of the debt cancellation or debt
suspension product shall be disclosed in writing to the buyer. The
extension of credit, terms of the credit, or the terms of the related
motor vehicle sale or lease shall not be conditioned on the purchase
of the debt cancellation or debt suspension product. Notwithstanding
any other provision of law, a debt cancellation or debt suspension
product shall not be considered insurance.
(C)
Single interest insurance shall be listed as a specific good in a
retail installment contract.
(D)
As used in this section, "single interest insurance" means
insurance that covers only the interest of the holder of the retail
installment contract.
Sec.
3905.426.
(A)
As used in this section:
(1)
"Contract holder" means the person who purchased a motor
vehicle ancillary product protection contract, any authorized
transferee or assignee of the purchaser, or any other person assuming
the purchaser's rights under the motor vehicle ancillary product
protection contract.
(2)
"Finance agreement" means a loan or retail installment
contract secured by a motor vehicle or a lease contract for the use
of a motor vehicle.
(2)
(3)
"Motor
vehicle" has the same meaning as in section 4501.01 of the
Revised Code and also includes utility vehicles
and under-speed vehicles
as defined in that section.
(3)(a)
(4)(a)
"Motor
vehicle ancillary product protection contract" means a contract
or agreement that is effective for a specified duration and paid for
by means other than the purchase of a motor vehicle, or its parts or
equipment, to perform any one or more of the following services:
(i)
Repair or replacement of glass on a motor vehicle necessitated by
wear and tear or damage caused by a road hazard;
(ii)
Removal of a dent, ding, or crease without affecting the existing
paint finish using paintless dent removal techniques but which
expressly excludes replacement of vehicle body panels, sanding,
bonding, or painting;
(iii)
Repair to the interior components of a motor vehicle necessitated by
wear and tear but which expressly excludes replacement of any part or
component of a motor vehicle's interior;
(iv)
Repair or replacement of tires or wheels damaged because of a road
hazard;
(v)
Replacement of a lost, stolen, or inoperable key or key fob
;
(vi)
In conjunction with a motor vehicle leased for use, the repair,
replacement, or maintenance of property, or indemnification for
repair, replacement, or maintenance, due to excess wear and use,
damage for items such as tires, paint cracks or chips, missing
interior or exterior parts, or excess mileage that results in a
lease-end charge, or any other charge for damage that is deemed as
excess wear and use by a lessor under a motor vehicle lease, provided
any such charge shall not exceed the purchase price of the vehicle at
the end of the lease term;
(vii)
Provide a benefit under a vehicle value protection agreement
.
(b)
A motor vehicle ancillary product protection contract may, but is not
required to, provide for incidental payment of indemnity under
limited circumstances, including, without limitation, towing, rental,
and emergency road services.
(c)
"Motor vehicle ancillary product protection contract" does
not include any of the following:
(i)
A motor vehicle service contract;
(ii)
A vehicle protection product warranty as defined in section 3905.421
of the Revised Code;
(iii)
A home service contract as defined in section 3905.422 of the Revised
Code;
(iv)
A consumer goods service contract as defined in section 3905.423 of
the Revised Code;
(v)
A contract for prepaid routine, scheduled maintenance only.
(4)
(5)
"Motor
vehicle service contract" means a contract or agreement to
perform or pay for the repair, replacement, or maintenance of a motor
vehicle due to defect in materials or workmanship, normal wear and
tear, mechanical or electrical breakdown, or failure of parts or
equipment of a motor vehicle, with or without additional provisions
for incidental payment of indemnity under limited circumstances,
including, without limitation, towing, rental, and emergency road
services, that is effective for a specified duration and paid for by
means other than the purchase of a motor vehicle.
(5)
(6)
"Provider"
means a person who is contractually obligated to a contract holder
under the terms of a motor vehicle ancillary product protection
contract.
(6)
(7)
"Road
hazard" means a condition that may cause damage or wear and tear
to a tire or wheel on a public or private roadway, roadside,
driveway, or parking lot or garage, including potholes, nails, glass,
road debris, and curbs. "Road hazard" does not include
fire, theft, vandalism or malicious mischief, or other perils
normally covered by automobile physical damage insurance.
(7)
(8)
"Reimbursement
insurance policy" means a policy of insurance issued by an
insurer authorized or eligible to do business in this state to a
provider to pay, on behalf of the provider in the event of the
provider's nonperformance, all covered contractual obligations
incurred by the provider under the terms and conditions of the motor
vehicle ancillary product protection contract.
(8)
(9)
"Supplier"
has the same meaning as in section 1345.01 of the Revised Code.
(10)
"Vehicle value protection agreement" includes a contractual
agreement that provides a benefit towards either the reduction of
some or all of the contract holder's current finance agreement
deficiency balance, or towards the purchase or lease of a replacement
motor vehicle or motor vehicle services, upon the occurrence of an
adverse event to the motor vehicle, including loss, theft, damage,
obsolescence, diminished value, or depreciation. "Vehicle value
protection agreement" includes trade-in-credit agreements,
diminished value agreements, depreciation benefit agreements, or
other similar agreements. "Vehicle value protection agreement"
does not include a debt suspension or debt cancellation product.
(B)
All motor vehicle ancillary product protection contracts issued in
this state shall be covered by a reimbursement insurance policy.
(C)
A motor vehicle ancillary product protection contract issued by a
provider that is required to be covered by a reimbursement insurance
policy under division (B) of this section shall conspicuously state
all of the following:
(1)
"This contract is not insurance and is not subject to the
insurance laws of this state."
(2)
That the obligations of the provider are guaranteed under a
reimbursement insurance policy;
(3)
That if a provider fails to perform or make payment due under the
terms of the contract within sixty days after the contract holder
requests performance or payment pursuant to the terms of the
contract, the contract holder may request performance or payment
directly from the provider's reimbursement insurance policy insurer,
including any obligation in the contract by which the provider must
refund the contract holder upon cancellation of a contract;
(4)
The name, address, and telephone number of the provider's
reimbursement insurance policy insurer.
(D)
A motor vehicle ancillary product protection contract that includes
repair or replacement of glass on a motor vehicle as provided in
division
(A)(3)(a)(i)
(A)(4)(a)(i)
of
this section, shall conspicuously state: "This contract may
provide a duplication of coverage already provided by your automobile
physical damage insurance policy."
(E)
A
vehicle value protection agreement may be canceled by the contract
holder within thirty days of the effective date of the agreement, and
the contract holder shall be entitled to a full refund of the
purchase price paid by the contract holder, if any, so long as no
benefits have been provided under the contract.
(F)
A vehicle value protection agreement that, under the terms of the
agreement, may be canceled by the contract holder more than thirty
days after the effective date of the agreement must state the
conditions under which it may be canceled, including the procedures
for requesting any refund of the purchase price paid by the contract
holder and the methodology for calculating any refund of the purchase
price.
(G)
The contract provider of the vehicle value protection agreement shall
mail a written notice to the contract holder at the last known
address of the contract holder contained in the records of the
contract provider at least five days prior to cancellation by the
contract provider. Prior notice is not required if the reason for
cancellation is nonpayment of the provider fee, a material
misrepresentation by the contract holder to the contract provider or
administrator, or a substantial breach of duties by the contract
holder relating to the covered product or the use of the covered
product. The notice shall state the effective date of the
cancellation and the reason for the cancellation. If a vehicle value
protection agreement is canceled by the contract provider for a
reason other than nonpayment of the provider fee, the provider shall
refund to the contract holder one hundred per cent of the unearned
provider fee paid by the contract holder, if any. If coverage under
the vehicle value protection agreement continues after a claim, then
all claims paid may be deducted from any refund required by this
division. A reasonable administrative fee of up to seventy-five
dollars may be charged by the contract provider and deducted from any
refund due under this division or division (F) of this section.
(H)
Any refund under divisions (E) and (F) of this section shall be paid
to the seller or assignee of a retail installment contract or lease
agreement unless otherwise agreed to by the contract holder and the
seller or assignee.
(I)
A
reimbursement insurance policy that is required to be issued under
this section shall contain:
(1)
A statement that if a provider fails to perform or make payment due
under the terms of the motor vehicle ancillary product protection
contract within sixty days after the contract holder requests
performance or payment pursuant to the terms of the contract, the
contract holder may request performance or payment directly from the
provider's reimbursement insurance policy insurer, including any
obligation in the contract by which the provider must refund the
contract holder upon cancellation of a contract.
(2)
A statement that in the event of cancellation of the provider's
reimbursement insurance policy, insurance coverage will continue for
all contract holders whose motor vehicle ancillary product protection
contracts were issued by the provider and reported to the insurer for
coverage during the term of the reimbursement insurance policy.
(F)
(J)
The
sale or issuance of a motor vehicle ancillary product protection
contract is a consumer transaction for purposes of sections 1345.01
to 1345.13 of the Revised Code. The provider is the supplier and the
contract holder is the consumer for purposes of those sections.
(G)
(K)
Unless
issued by an insurer authorized or eligible to do business in this
state, a motor vehicle ancillary product protection contract does not
constitute a contract substantially amounting to insurance, or the
contract's issuance the business of insurance, under section 3905.42
of the Revised Code.
(H)
(L)
Unless
issued by an insurer authorized or eligible to do business in this
state, a contract identified in division
(A)(3)(c)(i)
(A)(4)(c)(i)
or
(v) of this section does not constitute a contract substantially
amounting to insurance, or the contract's issuance the business of
insurance, under section 3905.42 of the Revised Code.
(I)
(M)
The
rights of a contract holder against a provider's reimbursement
insurance policy insurer as provided in this section apply only in
regard to a reimbursement insurance policy issued under this section.
This section does not create any contractual rights in favor of a
person that does not qualify as an insured under any other type of
insurance policy described in Title XXXIX of the Revised Code. This
section does not prohibit the insurer of a provider's reimbursement
insurance policy from assuming liability for contracts issued prior
to the effective date of the policy or July 1, 2009.
(J)
(N)
A
contract or agreement described in division (A)(3)(a)(iv) of this
section in which the provider is a tire manufacturer shall be exempt
from the requirements of division (B) of this section if the contract
or agreement conspicuously states all of the following:
(1)
That the contract or agreement is not an insurance contract;
(2)
That any covered obligations or claims under the contract or
agreement are the responsibility of the provider;
(3)
The name, address, and telephone number of any administrator
responsible for the administration of the contract or agreement, the
provider obligated to perform under the contract or agreement, and
the contract seller;
(4)
The procedure for making a claim under the contract or agreement,
including a toll-free telephone number for claims service and a
procedure for obtaining emergency repairs or replacements performed
outside normal business hours.
Sec.
4509.06.
(A)
The
driver of any motor vehicle which
Any
person who
is
in any manner involved in a motor vehicle accident
within six months of the accident
,
including as the driver of a motor vehicle, the owner of property, or
any person sustaining bodily injury or property damage,
may
,
within six months after the accident,
forward a written report of the accident to the registrar of motor
vehicles on a form prescribed by the registrar alleging that a driver
or owner of any
other
vehicle
involved in the accident was uninsured at the time of the accident.
(B)
Upon receipt of the accident report, the registrar shall send a
notice by regular mail to the driver and owner alleged to be
uninsured requiring the person to give evidence that the person had
proof of financial responsibility in effect at the time of the
accident.
(C)
Within thirty days after the mailing of the notice by the registrar,
the driver of the vehicle alleged to be uninsured shall forward a
report together with acceptable proof of financial responsibility to
the registrar in a form prescribed by the registrar. The forwarding
of the report by the owner of the motor vehicle involved in the
accident is deemed compliance with this section by the driver. This
section does not change or modify the duties of the driver or
operator of a motor vehicle as set forth in section 4549.02 of the
Revised Code.
Sec.
4509.70.
(A)
After consultation with the insurance companies authorized to issue
automobile liability or physical damage policies, or both, in this
state, the superintendent of insurance shall approve a reasonable
plan, fair and equitable to the insurers and to their policyholders,
for the apportionment among such companies of applicants for such
policies and for motor-vehicle liability policies who are in good
faith entitled to but are unable to procure such policies through
ordinary methods. When any such plan has been approved by the
superintendent, all such insurance companies shall subscribe and
participate. Any applicant for such policy, any person insured under
such plan of operation, and any insurance company affected, may
appeal to the superintendent of insurance from any ruling or decision
of the manager or committee designated in the plan to operate the
assigned risk insurance plan. Any order or act of the superintendent
under this section is subject to review as provided in sections
119.01 to 119.13 of the Revised Code, at the instance of any party in
interest.
(B)
The plan described in division (A) of this section may permit the
assigned risk insurance plan to directly issue and process claims
arising from such policies described in division (A) of this section
to applicants of automobile insurance policies who are in good faith
entitled to but are unable to procure such policies through ordinary
methods.
(C)
Every form of a policy, endorsement, rider, manual of
classifications, rules, and rates, every rating plan, and every
modification of any of them proposed to be used by the assigned risk
insurance plan shall be filed, or the plan may satisfy its obligation
to make such filings, as described in section 3937.03 of the Revised
Code.
(D)
Any automobile insurance policy issued by the assigned risk insurance
plan under division (B) of this section:
(1)
Shall be recognized as if issued by an insurance company authorized
to do business in this state;
(2)
Shall meet all requirements of proof of financial responsibility as
described in division (K) of section 4509.01 of the Revised Code.
(E)
Proof of financial responsibility provided by the assigned risk
insurance plan to an automobile insurance policyholder that meets the
requirements described in division (G)(1)(a) or (b) of section
4509.101 of the Revised Code shall be recognized as if issued by an
insurance company authorized to do business in this state to
demonstrate proof of financial responsibility under section 4509.101
of the Revised Code.
(F)
The assigned risk insurance plan designated in division (A) of this
section shall do both of the following:
(1)
Make annual audited financial reports available to the superintendent
of insurance promptly upon the completion of such audit;
(2)
Upon reasonable notice, make available to the superintendent of
insurance all books and records relating to the insurance
transactions of the assigned risk insurance plan.
(G)(1)
Except as provided in division (G)(2) of this section, records
created, held by, or pertaining to the assigned risk insurance plan
are not public records under section 149.43 of the Revised Code, are
confidential, and are not subject to inspection or disclosure.
(2)
Division (G)(1) of this section does not apply to the plan of
operation and other information required to be filed under this
section with the superintendent unless otherwise prohibited from
release by law.
(H)(1)
For the purposes of division (H) of this section, "insurance
agent" has the same meaning as in section 3905.01 of the Revised
Code.
(2)
Provided that the assigned risk insurance plan establishes
registration procedures for insurance agents under division (H)(3) of
this section, the plan shall not accept an application for an
automobile insurance policy issued under division (B) of this section
unless that application is submitted through an insurance agent
registered in accordance with those procedures.
(3)
The plan may do all of the following:
(a)
Establish procedures to register insurance agents;
(b)
Establish separate registrations for commercial and personal
insurance agents, or one registration for both;
(c)
Empower the manager of the plan to make determinations on
registration status, including by revoking an insurance agent's
registration.
(4)
If an insurance agent is denied registration with the plan, or the
insurance agent's registration is revoked, the plan may notify the
superintendent of the plan's decision. The plan and manager are
immune from civil liability for any decision to deny or revoke
registration and from any decision to report denials or revocations
to the superintendent.
(5)
All insurance agents submitting applications to the plan for
automobile insurance coverage have an affirmative duty to ensure that
all information included in the application and any supporting
materials is true and accurate.
(6)(a)
An insurance agent shall not submit an application to the plan for
automobile insurance coverage unless the agent exercises due
diligence in confirming that the person seeking insurance is unable
to obtain coverage through an insurer authorized to do business in
this state.
(b)
For the purposes of this section, due diligence requires an insurance
agent to contact at least five of the authorized insurers the agent
represents or, if the agent does not represent five authorized
insurers that customarily write automobile insurance coverage, as
many of such insurers as the agent represents.
(c)
An insurance agent may assume that insurance coverage cannot be
procured for the applicant through ordinary methods after each
insurer contacted under division (H)(6)(b) of this section declines
to provide coverage.
(d)
An insurance agent may assume that an authorized insurer declines to
provide coverage to the applicant seeking insurance upon either of
the following:
(i)
Receiving notice from the insurer declining coverage;
(ii)
Receiving no response from the insurer within ten days after the date
the insurance agent initially makes contact with the insurer.
(e)
The determination of whether an insurance agent has adequately
complied with the due diligence requirements is at the discretion of
the manager of the plan.
(f)
An agent shall not submit an application on behalf of an applicant to
the plan for any automobile insurance policy if any insurer admitted,
authorized, or otherwise eligible to do business in this state has in
any way communicated a willingness to insure the applicant, even if
coverage provided by the plan costs less than other insurers.
(g)
The manager of the plan may revoke the registration of an insurance
agent who fails to comply with division (H)(6) of this section.
Section
2.
That
existing sections 1317.05, 3905.426, 4509.06,
and
4509.70 of the Revised Code are hereby repealed.