Tex.
Fin. Code Section 397.006
Required Debt Cancellation Agreement Language
(1)
the contact information of the lessor, the holder, and any administrator of the agreement;(2)
the name and address of the lessee;(3)
the cost and term of the debt cancellation agreement;(4)
the procedure the lessee must follow to obtain benefits under the terms of the debt cancellation agreement, including a telephone number and address where the lessee may provide notice under the debt cancellation agreement;(5)
the period during which the lessee is required to notify the lessor, the holder, or any administrator of the agreement of any potential loss under the debt cancellation agreement for total loss or theft of the covered vehicle;(6)
that in order to make a claim, the lessee must provide or complete some or all of the following documents and provide those documents to the lessor, the holder, or any administrator of the agreement:(A)
a debt cancellation request form;(B)
proof of loss and settlement payment from the lessee’s primary comprehensive, collision, or uninsured or underinsured motorist policy or other parties’ liability insurance policy for the settlement of the insured total loss of the covered vehicle;(C)
verification of the lessee’s primary insurance deductible;(D)
a copy of any police report filed in connection with the total loss or theft of the covered vehicle; and(E)
a copy of the damage estimate;(7)
that documentation not described by Subdivision (6) or required by the lessor, the holder, or any administrator of the agreement is not required to substantiate the loss or determine the amount of debt to be canceled;(8)
that notwithstanding the collection of the documents under Subdivision (6), on reasonable advance notice the lessor, the holder, or any administrator of the agreement may inspect the lessee’s covered vehicle;(9)
that the lessor or holder will cancel all or part of the lessee’s obligation as provided in the debt cancellation agreement on the occurrence of total loss or theft of the covered vehicle;(10)
the method to be used to calculate refunds;(11)
the method for calculating the amount to be canceled under the debt cancellation agreement on the occurrence of total loss or theft of a covered vehicle;(12)
that purchase of a debt cancellation agreement is not required for the lessee to obtain a lease and will not be a factor in the lease approval process;(13)
that in order to cancel the debt cancellation agreement and receive a refund, the lessee must provide a written request to cancel to the lessor, the holder, or any administrator of the agreement;(14)
that if total loss or theft of the covered vehicle has not occurred, the lessee has 30 days from the date of the lease or the issuance of the debt cancellation agreement, whichever is later, or a longer period as provided under the debt cancellation agreement, to cancel the debt cancellation agreement and receive a full refund; and(15)
that the lessor will cancel certain amounts under the debt cancellation agreement for total loss or theft of a covered vehicle, in the following or substantially similar language: “YOU WILL CANCEL CERTAIN AMOUNTS I OWE UNDER THIS LEASE IN THE CASE OF A TOTAL LOSS OR THEFT OF THE COVERED VEHICLE AS STATED IN THE DEBT CANCELLATION AGREEMENT.”
Source:
Section 397.006 — Required Debt Cancellation Agreement Language, https://statutes.capitol.texas.gov/Docs/FI/htm/FI.397.htm#397.006 (accessed Jun. 5, 2024).
