| 1 | 1 | | By: Garcia Hernandez H.B. No. 854 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | A BILL TO BE ENTITLED |
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| 7 | 7 | | AN ACT |
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| 8 | 8 | | relating to payment of the replacement cost of lost or damaged |
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| 9 | 9 | | property under a homeowner's, renter's, or condominium owner's |
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| 10 | 10 | | insurance policy. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Subchapter A, Chapter 2002, Insurance Code, is |
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| 13 | 13 | | amended by adding Section 2002.007 to read as follows: |
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| 14 | 14 | | Sec. 2002.007. REPLACEMENT COST COVERAGE REQUIREMENTS. (a) |
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| 15 | 15 | | This section applies to each insurer authorized to engage in the |
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| 16 | 16 | | business of residential property insurance in this state, including |
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| 17 | 17 | | a county mutual insurance company, Lloyd's plan, and reciprocal or |
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| 18 | 18 | | interinsurance exchange. |
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| 19 | 19 | | (b) A homeowner's, renter's, or condominium owner's |
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| 20 | 20 | | insurance policy that includes replacement cost coverage must |
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| 21 | 21 | | provide that in a valid claim for loss of or damage to insured |
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| 22 | 22 | | property, the insurer must make an initial payment of not less than |
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| 23 | 23 | | 80 percent of the estimated cost to repair or replace the lost or |
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| 24 | 24 | | damaged dwelling or personal property minus the applicable |
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| 25 | 25 | | deductible. |
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| 26 | 26 | | (c) On documentation provided to the insurer that repair or |
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| 27 | 27 | | replacement is completed and on payment of the applicable |
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| 28 | 28 | | deductible, the insurer shall make the remaining payment due after |
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| 29 | 29 | | the initial payment. |
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| 30 | 30 | | (d) An insurer is not required to pay more than the total |
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| 31 | 31 | | cost to replace the lost or damaged dwelling or personal property |
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| 32 | 32 | | with property of a like kind and quality. |
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| 33 | 33 | | SECTION 2. Section 2002.007, Insurance Code, as added by |
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| 34 | 34 | | this Act, applies only to an insurance policy delivered, issued for |
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| 35 | 35 | | delivery, or renewed on or after January 1, 2026. |
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| 36 | 36 | | SECTION 3. This Act takes effect September 1, 2025. |
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