By: Taylor of Galveston H.B. No. 2924
A BILL TO BE ENTITLED
AN ACT
relating to contractual limitations periods in property insurance
policies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 2301, Insurance Code, is
amended by adding Section 2301.0525 to read as follows:
Sec. 2301.0525. CONTRACTUAL LIMITATIONS PERIOD IN PROPERTY
INSURANCE FORMS. (a) An insurer may file and the department shall
approve policy forms or endorsements that provide for a contractual
limitations period for filing suit for first party claims under the
policy.
(b) The contractual limitations period in a residential
property or commercial property insurance policy for a first party
claim must not be less than two (2) years from the date of the loss.
(c) Any limitation, condition, stipulation, or agreement in
a policy in violation of this Section shall be void, but such
voiding shall not affect the validity of the other provisions of the
policy.
(d) To the extent there is any conflict with Section 16.070
of the Civil Practices & Remedies Code or other law, this Section
shall prevail.
SECTION 2. Section 16.070, Civil Practices & Remedies Code,
is amended to read as follows:
Sec. 16.070. CONTRACTUAL LIMITATIONS PERIOD. (a) Except as
provided by [Subsection] Subsections (b) and c, a person may not
enter a stipulation, contract, or agreement that purports to limit
the time in which to bring suit on the stipulation, contract, or
agreement to a period shorter than two years. A stipulation,
contract, or agreement that establishes a limitations period that
is shorter than two years is void in this state.
(b) This section does not apply to a stipulation, contract,
or agreement relating to the sale or purchase of a business entity
if a party to the stipulation, contract, or agreement pays or
receives or is obligated to pay or entitled to receive
consideration under the stipulation, contract, or agreement having
an aggregate value of not less than $500,000.
(c) This section does not apply to insurance policies
insuring residential or commercial property located in this state
containing stipulations, contracts, or agreements establishing a
limitations period in the policy. The stipulations, contracts, or
agreements in such insurance policies may not limit the time to
bring suit for a first party claim under the policy to a period
shorter than two years from the date of loss.
SECTION 3. This Act applies to all policies issued or
renewed on or after the effective date of this Act. This Act is
effective September 1, 2011.