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A BILL TO BE ENTITLED
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AN ACT
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relating to coverage for certain water damage claims under certain |
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residential property insurance policies. |
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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. COVERAGE FOR WATER DAMAGE CLAIMS. (a) In |
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this section, "insurer" and "residential property insurance" have |
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the meanings assigned by Section 544.352. |
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(b) An insurer that issues a residential property insurance |
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policy, including an endorsement, that provides coverage for a loss |
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resulting from water damage may not restrict coverage or deny a |
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claim under the policy based on the duration of the seepage or |
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leakage of water if the insured: |
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(1) demonstrates, in good faith, that the water damage |
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could not have reasonably been discovered earlier; and |
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(2) provides prompt notice after the loss was |
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discovered. |
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(c) Nothing in this section affects a policy provision |
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requiring an insured to promptly take action to mitigate a loss or |
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further damage after the insured discovers the water damage. |
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(d) If an insurer requires a policyholder to provide notice |
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of a loss resulting from water damage within a certain time period, |
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the insurer must provide a written disclosure to the policyholder |
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that clearly describes the time period within which the |
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policyholder must submit a water damage claim. The insurer must |
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include the disclosure on the policy's declarations page or a |
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separate disclosure page provided to the policyholder with the |
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declarations page. |
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(e) The commissioner may adopt rules as necessary to |
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implement this section. |
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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 that is delivered, |
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issued for delivery, or renewed on or after January 1, 2018. A |
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policy delivered, issued for delivery, or renewed before that date |
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is governed by the law as it existed immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 3. This Act takes effect September 1, 2017. |