78R9345 KCR-D


By:  Taylor                                                       H.B. No. 1338

Substitute the following for H.B. No. 1338:                                   

By:  Taylor                                                   C.S.H.B. No. 1338



A BILL TO BE ENTITLED

AN ACT

relating to the amount of homeowners insurance or other residential 
property insurance required in connection with certain financing 
arrangements.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 2, Article 21.48A, Insurance Code, is 
amended by adding Subsection (g) to read as follows:
	(g)  No Lender, as a condition of financing a residential 
mortgage or providing other financing arrangements for residential 
property, including a mobile or manufactured home, may require a 
Borrower to purchase homeowners insurance coverage, mobile or 
manufactured home insurance coverage, or other residential 
property insurance coverage in an amount that exceeds the 
replacement value of the dwelling and its contents, regardless of 
the amount of the mortgage or other financing arrangement entered 
into by the Borrower.  A Lender may not include the fair market 
value of the land on which a dwelling is located in the replacement 
value of the dwelling and its contents.
	SECTION 2.  This Act takes effect September 1, 2003, and 
applies only to a mortgage or other financing arrangement for 
residential property that is entered into on or after January 1, 
2004.  A mortgage or other financing arrangement for residential 
property that is entered into before January 1, 2004, is governed by 
the law as it existed immediately before the effective date of this 
Act, and the former law is continued in effect for that purpose.