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A BILL TO BE ENTITLED
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AN ACT
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relating to the determination of the amount of payment on certain |
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claims under residential property insurance policies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 2002, Insurance Code, is |
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amended by adding Section 2002.007 to read as follows: |
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Sec. 2002.007. REPLACEMENT COST REQUIRED. (a) In this |
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section "residential property insurance" has the meaning assigned |
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by Section 2301.002. |
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(b) This section applies to an insurer that is subject to |
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Chapter 2301 and is authorized to write residential property |
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insurance in this state. |
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(c) An insurer that provides residential property insurance |
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coverage for real or tangible personal property in this state must |
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pay a policyholder the actual cost of replacing, with property of a |
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like kind and quality, any covered property that is damaged or |
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destroyed as a result of a covered peril. |
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(d) When paying a policyholder for replacing any covered |
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property that is damaged or destroyed as a result of a covered |
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peril, an insurer may not elect to pay the policyholder any amount |
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that is less than the amount described by Subsection (c), including |
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paying a policyholder based on: |
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(1) the actual value of the covered property at the |
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time the property sustained a loss or was destroyed; or |
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(2) the stated value of the covered property at the |
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time the property sustained a loss or was destroyed. |
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(e) The commissioner shall adopt rules concerning the |
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documentation an insurer may require from a policyholder before |
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paying a claim in accordance with this section. |
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SECTION 2. The change in law made by this Act applies only |
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to a residential property insurance policy that is delivered, |
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issued for delivery, or renewed on or after January 1, 2008. A |
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residential property insurance policy that is delivered, issued for |
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delivery, or renewed before January 1, 2008, is covered by the law |
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in effect at the time the policy was delivered, issued for delivery, |
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or renewed, and that law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2007. |