Texas § FI.342.401 - REQUIRED PROPERTY INSURANCE

§ FI.342.401. REQUIRED PROPERTY INSURANCE

REQUIRED PROPERTY INSURANCE. (a) On a loan that is subject to Subchapter E with a cash advance of $300 or more, a lender may require a borrower to insure tangible personal property offered as security for the loan. (b) On a secondary mortgage loan, a lender may require a borrower to provide property insurance as security against reasonable risks of loss, damage, and destruction. (c) The insurance coverage and the premiums or charges for the coverage must bear a reasonable relationship to: (1) the amount, term, and conditions of the loan; (2) the value of the collateral; and (3) the existing hazards or risk of loss, damage, or destruction. (d) The insurance may not: (1) cover unusual or exceptional risks; or (2) provide coverage not ordinarily included in policies issued to the general public. (e) A creditor may not require the purchase of duplicate property insurance if the creditor has knowledge that the borrower: (1) has valid and collectible insurance covering the property; and (2) has provided a loss payable endorsement sufficient to protect the creditor. (f) For purposes of determining the knowledge required under Subsection (e), a creditor may rely on a written consent to purchase insurance in which the borrower is given the opportunity to disclose the existence of other coverage. Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 909, Sec. 2.16, eff. Sept. 1, 1999.