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.