80R7664 PB-F
 
  By: Ellis S.B. No. 898
 
 
 
   
 
 
A BILL TO BE ENTITLED
AN ACT
relating to coverage under certain residential property insurance
policies for losses incurred because of storm surges.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Subtitle D, Title 10, Insurance Code, is amended
by adding Chapter 2010 to read as follows:
CHAPTER 2010. RESIDENTIAL PROPERTY INSURANCE COVERAGE FOR CERTAIN
LOSSES INCURRED BECAUSE OF STORM SURGES
       Sec. 2010.001.  DEFINITIONS. In this chapter:
             (1)  "Insurer" means an insurance company, reciprocal
or interinsurance exchange, mutual insurance company, capital
stock company, county mutual insurance company, Lloyd's plan, or
other legal entity engaged in the business of residential property
insurance in this state. The term includes:
                   (A)  an affiliate as described by Section
823.003(a) if that affiliate is authorized to write and is writing
residential property insurance in this state;
                   (B)  the Texas Windstorm Insurance Association
created and operated under Chapter 2210; and
                   (C)  the FAIR Plan Association under Chapter 2211.
             (2)  "Residential property insurance" means insurance
against loss to real or tangible personal property at a fixed
location that is provided through a homeowners insurance policy, a
residential fire and allied lines insurance policy, or a farm and
ranch owners insurance policy.
             (3)  "Storm surge" means the onshore rush of sea or lake
water caused primarily by the high winds associated with a
landfalling cyclonic storm and secondarily by the low pressure of
the storm.
       Sec. 2010.002.  COVERAGE FOR CERTAIN LOSSES INCURRED BECAUSE
OF STORM SURGE REQUIRED. Notwithstanding any other law, an insurer
may not issue a residential property insurance policy in this state
that excludes coverage for losses to covered property attributable
to storm surges.
       Sec. 2010.003.  NOT GROUNDS FOR DENIAL; BURDEN OF PROOF. (a)
An insurer may not assert as a ground for total denial of a claim
involving storm surge damage that an excluded risk under a
residential insurance policy contributed to the loss incurred by an
insured under the policy if there is any evidence that a covered
risk may also have contributed to the loss claimed by the insured.
       (b)  The insurer has the burden of proof regarding damage
caused by an excluded risk.
       SECTION 2.  Section 2002.006, Insurance Code, is amended by
adding Subsection (d) to read as follows:
       (d)  Notwithstanding Subsection (a), insurance coverage
under a residential property insurance policy for losses
attributable to storm surges is subject to Chapter 2010.
       SECTION 3.  Subchapter E, Chapter 2210, Insurance Code, is
amended by adding Section 2210.210 to read as follows:
       Sec. 2210.210.  WINDSTORM AND HAIL INSURANCE: COVERAGE FOR
LOSSES RELATED TO STORM SURGE. (a) Notwithstanding any other
provision of this chapter, a policy issued by the association under
this chapter must include coverage for losses to insured property
incurred in a first tier coastal county that are attributable to
storm surges.
       (b)  The association is subject to Chapter 2010.
       SECTION 4.  Section 2211.156, Insurance Code, is amended to
read as follows:
       Sec. 2211.156.  CERTAIN COVERAGE EXCLUDED. (a) The FAIR
Plan may not provide windstorm and hail insurance coverage for a
risk eligible for that coverage under Chapter 2210.
       (b)  Notwithstanding Subsection (a), the FAIR Plan may
provide coverage for incurred losses that are attributable to storm
surges.
       SECTION 5.  This Act applies only to an insurance policy
delivered, issued for delivery, or renewed on or after January 1,
2008. A policy delivered, issued for delivery, or renewed before
January 1, 2008, is governed by the law as it existed immediately
before the effective date of this Act, and that law is continued in
effect for that purpose.
       SECTION 6.  This Act takes effect September 1, 2007.