78R5329 KCR-F

By:  Taylor                                                       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, may require a Borrower to purchase homeowners 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.