HBA-TBM H.B. 1461 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1461
By: Moreno, Joe E.
Insurance
3/11/2001
Introduced



BACKGROUND AND PURPOSE 

Currently, there are few insurers that offer a replacement cost homeowners
insurance policy that provides coverage below 80 percent of the home's
value.  If the home is insured for at least 80 percent of the full
replacement value, then the insurer will pay the full cost of any partial
loss.  For those companies that offer a policy that covers a home below 80
percent, the insurer will pay only part of the expense of a partial loss,
which is the penalty for being underinsured.  House Bill 1461 requires
insurers to offer replacement coverage at any percentage designated by the
homeowner at the time the policy is purchased.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of insurance in
SECTION 1 (Art. 5.35-2, Insurance Code) of this bill.   

ANALYSIS

House Bill 1461 amends the Insurance Code to provide that an insurer
writing homeowners insurance in this state must offer a policy that
provides coverage for the percentage, not to exceed 100 percent, of a
home's market or replacement value that the homeowner designates at the
time the policy is purchased. The bill requires the commissioner of
insurance to adopt rules as necessary to implement these provisions. The
bill does not affect any right of a person who holds a lien on a home to
require a homeowner to obtain homeowners insurance coverage in an amount
specified by the lien holder.   

An insurer is not required to comply with this Act until September 1, 2002.
The commissioner shall adopt all rules necessary to implement this Act not
later than January 1, 2002.   

EFFECTIVE DATE

September 1, 2001.