HB 187: Professions and businesses; contractors; change certain provisions

Vehicle value protection agreements are add-on products sold with car purchases or loans that promise to pay toward a replacement vehicle if the original is totaled or stolen, covering things like trade-in value gaps or diminished value. Georgia law currently has no specific rules governing these agreements. This bill adds a new article to the state's trade practices law (O.C.G.A. Title 10, Chapter 1) that requires providers to make clear disclosures about costs, terms, and cancellation rights, and requires companies to back their promises with insurance, a funded reserve account, or a large net worth requirement. Consumers would get at least a 30 day 'free look' period to cancel for a full refund if no benefits were used, and rules for partial refunds and administrative fees if a provider cancels the agreement. The bill also lets the Attorney General sue violators for civil penalties up to $2,500 per violation and treats violations as breaches of Georgia's Fair Business Practices Act of 1975.

• Creates a new legal category, 'vehicle value protection agreements,' covering products like trade-in and diminished value protection sold with a vehicle purchase or loan.
• Requires providers to clearly disclose contract terms, costs, benefit conditions, and cancellation rights, including a required statement on the first page about the free look period.
• Requires providers to back their promises through an insurer meeting minimum capital standards, a funded reserve account plus a state trust deposit, or a parent company with at least $100 million in net worth.
• Guarantees consumers a free look period of at least 30 days with a full refund if no benefits were used, and sets refund and fee rules if a provider cancels the agreement.
• Bans conditioning a vehicle loan or purchase agreement on a consumer buying one of these value protection agreements.
• Lets the Attorney General sue providers for civil penalties up to $2,500 per violation and treats violations as Fair Business Practices Act violations.

Car buyers and borrowers who purchase add-on vehicle value protection products, the companies and administrators that sell and manage these agreements, insurers that back them, car dealerships that offer them at sale, and the Georgia Attorney General's office, which would gain enforcement authority.

Georgians who buy these add-on products when financing a car would gain guaranteed disclosure, a minimum 30-day cancellation window with refund rights, and assurance that providers have money set aside or insurance to pay claims, addressing a market currently without specific state rules.

• New Code Section 10-1-970 defines key terms including 'provider,' 'administrator,' 'consumer,' 'covered vehicle,' and 'vehicle value protection agreement.'
• Section 10-1-971 requires conspicuous disclosure of contract terms, cancellation rights, and a required warning statement on the agreement's first page, and bars conditioning a loan on buying the agreement.
• Section 10-1-972 requires providers to secure their obligations through a qualifying insurer, a funded reserve account plus state trust deposit, or a parent company with at least $100 million net worth.
• Section 10-1-973 sets a minimum 30-day free look period, refund rules for consumer or provider cancellation, and allows a provider to charge up to $75 in administrative fees on cancellation.
• Section 10-1-974 authorizes the Attorney General to sue for injunctions, damages, and civil penalties up to $2,500 per violation, and ties violations to the Fair Business Practices Act of 1975.
• Section 2 repeals any conflicting laws.

1. 2026-03-25Senate Committee Favorably Reported By Substitute (Senate)
2. 2026-01-12Senate Recommitted (Senate)
3. 2025-03-25Senate Read Second Time (Senate)
4. 2025-03-21Senate Committee Favorably Reported (Senate)
5. 2025-02-28Senate Read and Referred (Senate)
6. 2025-02-27House Passed/Adopted By Substitute (House)
7. 2025-02-27House Third Readers (House)
8. 2025-02-11House Committee Favorably Reported By Substitute (House)

• Dale Washburn (R, HD-144)Primary sponsor
• Alan Powell (R, HD-033)
• Lauren McDonald (R, HD-026)
• Kasey Carpenter (R, HD-004)
• Derrick McCollum (R, HD-030)
• Steve Tarvin (R, HD-002)
• Ricky Williams (R, SD-025)

1. PassedHouse voteFebruary 27, 2025

   157 yea, 2 nay (7 not voting, 14 absent)

   Passage: House Vote #110

• car buying protections
• consumer protection
• vehicle value protection agreements
• auto financing
• Attorney General enforcement