| 4 | 6 | | |
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| 5 | 7 | | |
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| 6 | 8 | | A BILL TO BE ENTITLED |
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| 7 | 9 | | AN ACT |
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| 8 | 10 | | relating to payment of the replacement cost of damaged property |
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| 9 | 11 | | under a homeowner's, renter's, or condominium owner's insurance |
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| 10 | 12 | | policy. |
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| 11 | 13 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 14 | | SECTION 1. Subchapter A, Chapter 2002, Insurance Code, is |
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| 13 | 15 | | amended by adding Section 2002.007 to read as follows: |
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| 14 | 16 | | Sec. 2002.007. REPLACEMENT COST COVERAGE REQUIREMENTS. (a) |
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| 15 | 17 | | This section applies to each insurer authorized to engage in the |
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| 16 | 18 | | business of residential property insurance in this state, including |
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| 17 | 19 | | a county mutual insurance company, Lloyd's plan, and reciprocal or |
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| 18 | 20 | | interinsurance exchange. |
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| 19 | 21 | | (b) A homeowner's, renter's, or condominium owner's |
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| 20 | 22 | | insurance policy that includes replacement cost coverage must |
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| 21 | 23 | | provide that in a valid claim for damage to insured property, the |
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| 22 | 24 | | insurer must make an initial payment of not less than 80 percent of |
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| 23 | 25 | | the estimated cost to repair or replace the damaged dwelling or |
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| 24 | 26 | | personal property minus the applicable deductible. |
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| 25 | 27 | | (c) On documentation provided to the insurer that repair or |
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| 26 | 28 | | replacement is completed and on payment of the applicable |
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| 27 | 29 | | deductible, the insurer shall make the remaining payment due after |
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| 28 | 30 | | the initial payment. |
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| 29 | 31 | | (d) An insurer is not required to pay more than the total |
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| 30 | 32 | | cost to replace lost or damaged personal property with property of a |
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| 31 | 33 | | like kind and quality. |
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| 32 | 34 | | SECTION 2. Section 2002.007, Insurance Code, as added by |
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| 33 | 35 | | this Act, applies only to an insurance policy delivered, issued for |
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| 34 | 36 | | delivery, or renewed on or after February 13, 2021. |
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| 35 | 37 | | SECTION 3. This Act takes effect immediately if it receives |
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| 36 | 38 | | a vote of two-thirds of all the members elected to each house, as |
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| 37 | 39 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 38 | 40 | | Act does not receive the vote necessary for immediate effect, this |
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| 39 | 41 | | Act takes effect September 1, 2021. |
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