Words and terms used in this subchapter that are defined in
Texas Finance Code, Chapter 342, have the meanings as defined in Chapter
342. The following words and terms will have the following meanings
unless the context clearly indicates otherwise.
(1) Personal property insurance--Coverage to insure
tangible personal property offered as security for a loan made under
Chapter 342.
(2) Property insurance--Coverage to insure either an
interest in real estate or tangible personal property offered as security
for a loan made under Chapter 342.
(3) Single-interest insurance--A form of property insurance
that protects only the lender's interest in the property.
(4) Credit insurance--Includes credit life insurance,
credit accident and health insurance, and credit involuntary unemployment
insurance.
(5) Total personal property loss--The loss of all items
of personal property listed as security for a loan and insured by
a particular insurance policy.
(6) Partial personal property loss--Any loss other
than a total personal property loss.
(7) Gap waiver agreement--An agreement that eliminates
or reduces the deficiency when the proceeds from the borrower's insurance
policy do not cover the unpaid net balance after the motor vehicle
has suffered a total loss or constructive total loss. The unpaid net
balance on the loan does not include:
(A) delinquent payments (any outstanding payment that
is more than 10 days past due);
(B) late charges;
(C) unearned interest;
(D) unearned insurance premiums;
(E) fees added after the date of the loan; or
(F) any portion of the borrower's basic comprehensive
and collision policy deductible that exceeds $1,000.
(8) Constructive total loss--A loss where the cost
to repair or replace the motor vehicle covered under the gap waiver
agreement would exceed an amount equal to the actual cash value of
the motor vehicle minus any salvage value. The actual cash value will
be determined as of the date of loss. The actual cash value will be
based on the "retail value" in the National Automobile Dealers Association
(NADA) or an equivalent official used car guide. The licensee will
consider the mileage, condition, and optional equipment of the motor
vehicle when using the NADA or an equivalent official used car guide.
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| Source Note: The provisions of this §83.801 adopted to be effective November 9, 2006, 31 TexReg 9001; amended to be effective November 4, 2010, 35 TexReg 9698; amended to be effective July 10, 2014, 39 TexReg 5142 |
