By: Taylor (Senate Sponsor - Averitt) H.B. No. 1338
(In the Senate - Received from the House May 7, 2003;
May 9, 2003, read first time and referred to Committee on Business
and Commerce; May 21, 2003, reported favorably by the following
vote: Yeas 9, Nays 0; May 21, 2003, sent to printer.)
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.
* * * * *