Tex. Fin. Code § 342.401 · Subchapter I. INSURANCE
REQUIRED PROPERTY INSURANCE.
Text — Current through the 89th 2nd Called Legislative Session, 2025
(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.
Notes and commentary — not statutory text
History
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.
Source of truth
- Edition
- Current through the 89th 2nd Called Legislative Session, 2025
- Official file
- https://statutes.capitol.texas.gov/Docs/FI/htm/FI.342.htm
- Text hash
- sha256 0ec23f115fd6d38b3d25e8aea8ae6b61c057cc461cbd431f8db86176b4ec50e7
- Composed by
- compose_tx.py 2026-10-05: the Legislative Council's chapter files read in document order; verify_tx.py's independent reading (lxml DOM walk) agrees character for character
Cited by 1 provision
Provisions in this library whose text cites Tex. Fin. Code § 342.401. Each shows the citation as that text prints it.
Procedural information only. Not legal advice and not a substitute for the advice of an attorney. Confirm the current text with the official publisher before relying on it.