Texas Finance Code

§ 342.401 — REQUIRED PROPERTY INSURANCE

FI § 342.401Title 4. REGULATION OF INTEREST, LOANS, AND FINANCED TRANSACTIONS · Part B. LOANS AND FINANCED TRANSACTIONS · Ch. 342. CONSUMER LOANS · Art. I. INSURANCE

Statute text

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(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.

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Legislative 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.