CHAPTER 2002. POLICY PROVISIONS AND FORMS FOR FIRE INSURANCE AND ALLIED LINES, INCLUDING RESIDENTIAL PROPERTY INSURANCE

State Codes and Statutes

Statutes > Texas > Insurance-code > Title-10-property-and-casualty-insurance > Chapter-2002-policy-provisions-and-forms-for-fire-insurance-and-allied-lines-including-residential-p

INSURANCE CODE

TITLE 10. PROPERTY AND CASUALTY INSURANCE

SUBTITLE D. FIRE INSURANCE AND ALLIED LINES,

INCLUDING RESIDENTIAL PROPERTY INSURANCE

CHAPTER 2002. POLICY PROVISIONS AND FORMS FOR FIRE INSURANCE AND

ALLIED LINES, INCLUDING RESIDENTIAL PROPERTY INSURANCE

SUBCHAPTER A. POLICY PROVISIONS

Sec. 2002.001. ENDORSEMENTS REDUCING AMOUNT OF COVERAGE. An

insurer may not use an endorsement to a policy form to which

Article 5.35, Subchapter B, or Subchapter B, Chapter 2301,

applies that reduces the amount of coverage that would otherwise

be provided under the policy unless:

(1) the insured requests the endorsement; or

(2) the insurer provides the policyholder with a written

explanation of the change made by the endorsement before the

effective date of the change.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 2, eff. April 1, 2007.

Sec. 2002.002. LIEN ON INSURED PROPERTY. A provision in an

insurance policy issued by an insurer subject to this subtitle or

Subchapter C, Chapter 5, is void if the provision states that the

encumbrance of the insured property by a lien of any character at

the time of or after the policy's issuance renders the policy

void.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 2, eff. April 1, 2007.

Sec. 2002.003. COVERAGES FOR SPOUSES AND FORMER SPOUSES. A

homeowners insurance policy or fire insurance policy promulgated

under Article 5.35 or filed and in effect as provided by

Subchapter B, Chapter 2301, may not be delivered, issued for

delivery, or renewed in this state unless the policy contains the

following language: "It is understood and agreed that this

policy, subject to all other terms and conditions contained in

this policy, when covering residential community property, as

defined by state law, shall remain in full force and effect as to

the interest of each spouse covered, irrespective of divorce or

change of ownership between the spouses unless excluded by

endorsement attached to this policy until the expiration of the

policy or until canceled in accordance with the terms and

conditions of this policy."

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 2, eff. April 1, 2007.

Sec. 2002.004. JEWELRY COVERAGE. (a) In this section,

"personal property insurance" means insurance against damage to

or loss of tangible personal property, including coverage

provided in a homeowners insurance policy, residential fire and

allied lines insurance policy, or farm and ranch owners insurance

policy.

(b) This section applies to each insurer that provides personal

property insurance in this state, including a county mutual

insurance company, farm mutual insurance company, Lloyd's plan,

and reciprocal or interinsurance exchange.

coverage in this state for jewelry may elect to pay either:

(1) the stated value of the jewelry item; or

(2) the actual cost of replacing the jewelry item with one of

like kind and quality.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 2, eff. April 1, 2007.

Sec. 2002.005. COINSURANCE CLAUSES. (a) Except as otherwise

provided by this section, an insurer subject to this subtitle or

Subchapter C, Chapter 5, may not issue an insurance policy or

contract covering property in this state that contains a clause

that:

(1) requires the insured to obtain or maintain a larger amount

of insurance than expressed in the policy or contract; or

(2) in any way provides that the insured is liable as a

coinsurer with the insurer issuing the policy or contract for any

part of the loss or damage that may be caused by fire to the

property described in the policy or contract.

(b) A clause described by Subsection (a) is void.

written on cotton, grain, or other products in the process of

marketing, shipping, storing, or manufacturing.

(d) An insured may be given an option to accept an insurance

policy or contract that contains a clause described by Subsection

(a) covering a class of property other than the property

described by Subsection (c), a private dwelling, or a stock of

merchandise offered for sale at retail that has a value of less

than $10,000, if the insured is allowed a reduction in the

premium rate for the policy or contract. A clause to which this

subsection applies is valid and binding. The commissioner may

promulgate the premium rates that apply to a coinsurance clause

under this subsection.

(e) The commissioner by order may authorize or require the use

of any form of coinsurance clause in connection with an insurance

policy that insures against the hazards of tornado, windstorm,

and hail on any class of property. The commissioner may adopt

rules with reference to:

(1) coinsurance clauses authorized or required by this

subsection and the use of those clauses; and

(2) credits in premium rates for the use of coinsurance clauses

authorized or required by this subsection.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 2, eff. April 1, 2007.

Sec. 2002.006. PROVISIONS GOVERNING CERTAIN CONDITIONS OR RISKS.

(a) This chapter; Sections 403.002, 2001.001-2001.006,

2001.009, and 2001.010; Subchapter H, Chapter 544; Subchapter D,

Chapter 1806; Chapters 2003, 2004, 2006, and 2171; and Articles

5.25, 5.25A, 5.25-3, 5.26, 5.27, 5.28, 5.29, 5.30, 5.31, 5.32,

5.34, 5.35, 5.39, 5.40, and 5.41 govern the following in the same

manner and to the same extent those provisions govern fire

insurance and fire insurance rates:

(1) insurance coverage for any of the following conditions or

risks:

(A) weather or climatic conditions, including lightning,

tornado, windstorm, hail, cyclone, rain, or frost and freeze;

(B) earthquake or volcanic eruption;

(D) excess or deficiency of moisture;

(E) flood;

(F) the rising water of an ocean or an ocean's tributary;

(G) bombardment, invasion, insurrection, riot, civil war or

commotion, military or usurped power, or any order of a civil

authority made to prevent the spread of a conflagration, epidemic

or catastrophe;

(H) vandalism or malicious mischief;

(I) strike or lockout;

(J) explosion, as provided by Subsection (b);

(K) water or other fluid or substance resulting from:

(i) the breakage or leakage of a sprinkler, pump, or other

apparatus erected for extinguishing fire, or a water pipe or

other conduit or container; or

(ii) casual water entering a building through a leak or opening

in the building or by seepage through building walls; or

(L) accidental damage to a sprinkler, pump, fire apparatus,

pipe, or other conduit or container described by Paragraph

(K)(i);

(2) premium rates in this state for the insurance described by

Subdivision (1); and

(3) all matters pertaining to the insurance described by

Subdivision (1), except as provided by this section with respect

to marine insurance as defined by Section 1807.001.

(b) In this section:

(1) "explosion" includes:

(A) the explosion of a pressure vessel, other than a steam

boiler of more than 15 pounds pressure, in a building designed

and used solely for residential purposes by not more than four

families;

(B) an explosion of any kind originating outside of an insured

building or outside of the building containing the insured

property;

steam or that is not operated with steam coils or steam jets; and

(D) an electric disturbance causing or concomitant with an

explosion in public service or public utility property; and

(2) insurance coverage for explosion does not include coverage

for loss of or damage to any property of the insured resulting

from the explosion of or injury to:

(A) a boiler, heater, or other fired pressure vessel;

(B) an unfired pressure vessel;

described by Paragraph (A) or (B);

(D) an engine, turbine, compressor, pump, or wheel;

(E) an apparatus generating, transmitting, or using electricity;

(F) any other machinery or apparatus connected with or operated

by a boiler, vessel, or machine described by Paragraphs (A)-(E).

(1) a farm mutual insurance company operating under Chapter 911;

(2) a county mutual insurance company operating under Chapter

912;

(3) a mutual insurance company engaged in business under Chapter

12, Title 78, Revised Statutes, before that chapter's repeal by

Section 18, Chapter 40, Acts of the 41st Legislature, 1st Called

Session, 1929, as amended by Section 1, Chapter 60, General Laws,

Acts of the 41st Legislature, 2nd Called Session, 1929, that

retains the rights and privileges under the repealed law to the

extent provided by those sections;

(4) the making of inspections or issuance of certificates of

inspections on a boiler, apparatus, or machinery described by

Subsection (b)(2), whether insured or otherwise; or

(5) the insurance of a vessel or craft, its cargo, marine

builder's risk, marine protection and indemnity, or another risk

commonly insured under a marine insurance policy, as

distinguished from an inland marine insurance policy.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 2, eff. April 1, 2007.

SUBCHAPTER B. POLICY FORMS

Sec. 2002.051. POLICY FORMS AND ENDORSEMENTS FOR RESIDENTIAL

PROPERTY INSURANCE. Notwithstanding Subsections (a)-(j), Article

5.35, policy forms and endorsements for residential property

insurance in this state are regulated under Subchapter A, Chapter

2301, and Article 5.13-2.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 2, eff. April 1, 2007.

Sec. 2002.052. APPLICABILITY OF OTHER LAW TO RESIDENTIAL

PROPERTY INSURANCE. An insurer may continue to use a policy form

or endorsement promulgated, approved, or adopted by the

commissioner under Article 5.35 before June 11, 2003, on

notification in writing to the commissioner that the insurer will

continue to use the policy form or endorsement.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 2, eff. April 1, 2007.

SUBCHAPTER C. ITEMS PROVIDED TO POLICYHOLDER IN CONNECTION WITH

INSURANCE POLICY

Sec. 2002.101. RATE ANALYSIS. (a) On issuing a fire insurance

policy, an insurer engaged in the business of fire insurance in

this state shall provide the policyholder with a written analysis

of the rate or premium charged for the policy showing the items

of charge and credit that determine the rate or premium.

(b) Subsection (a) does not apply if the insurer has previously

provided the policyholder with an analysis of the rate or

premium.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 2, eff. April 1, 2007.

Sec. 2002.102. NOTICE OF RENEWAL. (a) An insurer, including a

farm mutual insurance company, county mutual insurance company,

Lloyd's plan, or reciprocal or interinsurance exchange, that

renews a homeowners insurance policy, fire and residential allied

lines insurance policy, farm and ranch owners insurance policy,

or farm and ranch insurance policy must provide the policyholder

with written notice of any difference between each form of the

policy offered to the policyholder on renewal and the form of the

policy held immediately before renewal.

(b) A notice provided under this section must be written in

plain language.

this section.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 2, eff. April 1, 2007.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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