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A BILL TO BE ENTITLED
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AN ACT
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relating to the payment of insurance deductibles and release of |
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insurance proceeds to contractors for property insurance claims. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 27.02, Business & Commerce Code, is |
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amended by amending Subsection (c) to read as follows: |
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(c) A person who sells goods or services commits an offense |
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if the person: |
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(1) advertises or promises to provide a good or service |
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to an insured under a property insurance policy in a transaction in |
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which: |
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(A) the good or service will be paid for by the |
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insured from the proceeds of a property insurance claim; and |
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(B) the person selling the good or service will[, |
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without the insurer's consent]: |
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(i) pay, waive, absorb, or otherwise decline |
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to charge or collect the amount of the insured's deductible; |
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(ii) provide a rebate or credit in |
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connection with the sale of the good or service that will offset all |
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or part of the amount paid by the insured as a deductible; or |
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(iii) in any other manner assist the insured |
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in avoiding monetary payment of the required insurance deductible; |
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or |
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(2) provides a good or service to an insured under a |
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property insurance policy knowing that the insured will pay for the |
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good or service with the proceeds of a claim under the policy and[, |
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without the insurer's consent]: |
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(A) pays, waives, absorbs, or otherwise declines |
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to charge or collect the amount of the insured's deductible; |
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(B) provides a rebate or credit in connection |
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with the sale of the good or service that offsets all or part of the |
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amount paid by the insured as a deductible; or |
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(C) in any other manner assists the insured in |
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avoiding monetary payment of the required insurance deductible. |
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SECTION 2. Section 707.004, Insurance Code, is amended to |
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read as follows: |
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Sec. 707.004. [REASONABLE PROOF OF] PAYMENT OF DEDUCTIBLE; |
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RELEASE OF PROCEEDS TO CONTRACTOR. (a) An insurer that issues a |
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property insurance policy with replacement cost coverage shall |
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[may] refuse to pay a claim for withheld recoverable depreciation |
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or a replacement cost holdback under the policy until the insurer |
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receives reasonable proof of payment by the policyholder of any |
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deductible applicable to the claim. Reasonable proof of payment |
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includes a canceled check, money order receipt, credit card |
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statement, or copy of an executed installment plan contract or |
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other financing arrangement that requires full payment of the |
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deductible over time. |
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(b) An insurer may not waive a deductible owed by a |
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policyholder under a property insurance policy in exchange for the |
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policyholder's use of the insurer's preferred or recommended |
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contractor for the claim subject to the deductible. |
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SECTION 3. Section 707.004, Insurance Code, as amended 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 the effective date of this Act. A |
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policy delivered, issued for delivery, or renewed before the |
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effective date of this Act is governed by the law as it existed |
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immediately before the effective date of this Act, and that law is |
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continued in effect for that purpose. |
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SECTION 4. This Act takes effect September 1, 2021. |