87R16483 SMT-D
By: Johnson of Dallas, Morrison, H.B. No. 1110
González of Dallas, Hunter, et al.
A BILL TO BE ENTITLED
AN ACT
relating to payment of the replacement cost of damaged property
under a homeowner's, renter's, or condominium owner's insurance
policy.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 2002, Insurance Code, is
amended by adding Section 2002.007 to read as follows:
Sec. 2002.007. REPLACEMENT COST COVERAGE REQUIREMENTS. (a)
This section applies to each insurer authorized to engage in the
business of residential property insurance in this state, including
a county mutual insurance company, Lloyd's plan, and reciprocal or
interinsurance exchange.
(b) A homeowner's, renter's, or condominium owner's
insurance policy that includes replacement cost coverage must
provide that in a valid claim for damage to insured property, the
insurer must make an initial payment of not less than 80 percent of
the estimated cost to repair or replace the damaged dwelling or
personal property minus the applicable deductible.
(c) On documentation provided to the insurer that repair or
replacement is completed and on payment of the applicable
deductible, the insurer shall make the remaining payment due after
the initial payment.
(d) An insurer is not required to pay more than the total
cost to replace lost or damaged personal property with property of a
like kind and quality.
SECTION 2. Section 2002.007, Insurance Code, as added by
this Act, applies only to an insurance policy delivered, issued for
delivery, or renewed on or after February 13, 2021.
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2021.