GENERAL ASSEMBLY OF NORTH CAROLINA
1993 SESSION
CHAPTER 720
The General Assembly of North Carolina enacts:
Section 1. The catch line and subsection (a) of G.S. 58-57-100 read as rewritten:
"§
58-57-100. Automobile Credit property insurance; automobile physical
damage insurance.
(a) Single interest or
dual interest physical damage insurance may be written on nonfleet private
passenger motor vehicles, as defined in G.S. 58-40-10, that are used as
collateral for loans made under Article 15 of Chapter 53 of the General Statutes,
Statutes. Automobile physical damage insurance as described in
this section is a form of credit property insurance, as referred to in G.S.
53-189. It is subject to the following conditions:
(1) Such insurance may be written only on a motor vehicle on which there is a valid inspection sticker.
(2) If a motor vehicle is already insured and the lender is named loss payee and that insurance continues in force, then no other physical damage insurance may be written.
(3) Notification must be given orally and in writing to the borrower that he has the option to provide his own insurance coverage at any point during the term of the loan.
(4) The creditor must have either a first or second lien on the motor vehicle to be insured.
(5) The amount of insurance coverage may not exceed the lesser of (i) the principal amount of the loan plus allowable charges, excluding interest, plus two scheduled installment payments or (ii) the actual fair market value of the collateral at the time the insurance is written.
(6) When a creditor accepts other collateral in addition to a motor vehicle as herein defined, the combined insurance on all collateral may not exceed the initial indebtedness of the loan."
Sec. 2. The catch line of G.S. 58-57-90 reads as rewritten:
"§
58-57-90. Credit property insurance. insurance; personal
household property coverage."
Sec. 3. This act is effective upon ratification.
In the General Assembly read three times and ratified this the 7th day of July, 1994.
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Dennis A. Wicker
President of the Senate
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Daniel Blue, Jr.
Speaker of the House of Representatives