| 1 | 1 | | 81R2182 KCR-D |
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| 2 | 2 | | By: Turner of Tarrant H.B. No. 1528 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the determination of the amount of payment on certain |
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| 8 | 8 | | claims under residential property insurance policies. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subchapter A, Chapter 2002, Insurance Code, is |
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| 11 | 11 | | amended by adding Section 2002.007 to read as follows: |
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| 12 | 12 | | Sec. 2002.007. REPLACEMENT COST REQUIRED. (a) In this |
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| 13 | 13 | | section "residential property insurance" has the meaning assigned |
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| 14 | 14 | | by Section 2301.002. |
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| 15 | 15 | | (b) This section applies to an insurer that is subject to |
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| 16 | 16 | | Chapter 2301 and is authorized to write residential property |
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| 17 | 17 | | insurance in this state. |
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| 18 | 18 | | (c) An insurer that provides residential property insurance |
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| 19 | 19 | | coverage for real or tangible personal property in this state must |
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| 20 | 20 | | pay a policyholder the actual cost of replacing, with property of a |
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| 21 | 21 | | like kind and quality, any covered property that is damaged or |
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| 22 | 22 | | destroyed as a result of a covered peril. |
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| 23 | 23 | | (d) When paying a policyholder for replacing any covered |
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| 24 | 24 | | property that is damaged or destroyed as a result of a covered |
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| 25 | 25 | | peril, an insurer may not elect to pay the policyholder any amount |
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| 26 | 26 | | that is less than the amount described by Subsection (c), including |
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| 27 | 27 | | paying a policyholder based on: |
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| 28 | 28 | | (1) the actual value of the covered property at the |
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| 29 | 29 | | time the property sustained a loss or was destroyed; or |
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| 30 | 30 | | (2) the stated value of the covered property at the |
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| 31 | 31 | | time the property sustained a loss or was destroyed. |
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| 32 | 32 | | (e) The commissioner shall adopt rules concerning the |
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| 33 | 33 | | documentation an insurer may require from a policyholder before |
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| 34 | 34 | | paying a claim in accordance with this section. |
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| 35 | 35 | | SECTION 2. The change in law made by this Act applies only |
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| 36 | 36 | | to a residential property insurance policy that is delivered, |
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| 37 | 37 | | issued for delivery, or renewed on or after January 1, 2010. A |
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| 38 | 38 | | residential property insurance policy that is delivered, issued for |
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| 39 | 39 | | delivery, or renewed before January 1, 2010, is covered by the law |
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| 40 | 40 | | in effect at the time the policy was delivered, issued for delivery, |
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| 41 | 41 | | or renewed, and that law is continued in effect for that purpose. |
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| 42 | 42 | | SECTION 3. This Act takes effect September 1, 2009. |
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