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A BILL TO BE ENTITLED
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AN ACT
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relating to payment of the replacement cost of damaged property |
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under a residential property insurance policy. |
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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 COVERAGE REQUIREMENTS. (a) |
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This section applies to each insurer authorized to engage in the |
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business of residential property insurance in this state, including |
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a county mutual insurance company, farm mutual insurance company, |
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Lloyd's plan, and reciprocal or interinsurance exchange. |
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(b) A residential property insurance policy that includes |
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replacement cost coverage must provide that in a valid claim for |
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damage to insured property, the insurer must pay the full |
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replacement cost of the property without regard to whether the |
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insured has completed repair or replacement of the property. |
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SECTION 2. Section 2002.007, Insurance Code, as added by |
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this Act, applies only to an insurance policy delivered, issued for |
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delivery, or renewed on or after January 1, 2022. |
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SECTION 3. This Act takes effect September 1, 2021. |