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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 lost or damaged |
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property under a homeowner's, renter's, or condominium owner's |
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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, Lloyd's plan, and reciprocal or |
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interinsurance exchange. |
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(b) A homeowner's, renter's, or condominium owner's |
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insurance policy that includes replacement cost coverage must |
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provide that in a valid claim for loss of or damage to insured |
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property, the insurer must make an initial payment of not less than |
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80 percent of the estimated cost to repair or replace the lost or |
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damaged dwelling or personal property minus the applicable |
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deductible. |
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(c) On documentation provided to the insurer that repair or |
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replacement is completed and on payment of the applicable |
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deductible, the insurer shall make the remaining payment due after |
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the initial payment. |
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(d) An insurer is not required to pay more than the total |
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cost to replace the lost or damaged dwelling or personal property |
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with property of a like kind and quality. |
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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, 2024. |
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SECTION 3. This Act takes effect September 1, 2023. |