Enrolled Bill Summary

Senate Bill 1211 amends the Finance Code to allow a creditor, after executing a credit agreement, to obtain collateral protection insurance for real property to cover either the replacement cost of any improvements or the amount of the debtor's unpaid indebtedness. The bill requires the debtor to reimburse the creditor for the premium, finance charge, and any other charges incurred by the creditor for the insurance and authorizes the creditor to use the debtor's previous insurance coverage to determine the amount of the replacement cost coverage. The bill requires the creditor to notify the debtor that the debtor must keep the collateral insured against damage in an amount specified by the creditor, rather than in an amount equal to the debtor's indebtedness to the creditor, as required under prior law. The bill also requires the creditor to inform the debtor that collateral protection insurance may be available through the Texas FAIR program at a lower cost and to provide the debtor with contact information for the program.