CHAPTER 263

(HB 1224)

Motor vehicle service contracts and breakdown insurance,
definitions revised.

         ENTITLED, An Act to  revise certain provisions relating to motor vehicle service contracts, mechanical breakdown insurance, and maintenance agreements.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:

     Section  1.  That subdivision (13A) of § 58-1-2 be repealed.

             (13A)      "Maintenance agreement," a contract of limited duration that provides for scheduled maintenance only;

     Section  2.  That subdivision (13B) of § 58-1-2 be amended to read as follows:

             (13B)      "Mechanical breakdown insurance," any contract or agreement , issued by an authorized insurer, to perform or indemnify for a specific duration the repair, replacement, or

maintenance of property for operational or structural failure due to a defect in materials, workmanship, or normal wear and tear;

     Section  3.  That subdivision (3) of § 58-1-3 be amended to read as follows:

             (3)      Motor vehicle service contracts which are contracts or agreements to perform or indemnify for a specific duration the repair, replacement, or maintenance of motor vehicles for operational or structural failure due to a defect in materials, workmanship, or normal wear and tear, with or without additional provisions for incidental payment of indemnity under limited circumstances, including towing, rental, and emergency road service. Consideration for a motor vehicle service contract shall be stated separately from the price of the motor vehicle . The term does not include mechanical breakdown insurance or maintenance agreements ;

     Signed February 28, 2001.

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