This section lets certain windstorm and hail policies include replacement cost coverage and sets when dwelling coverage is extended or limited based on the insurance amount relative to replacement cost.
Sec. 2210.207. WINDSTORM AND HAIL INSURANCE: REPLACEMENT COST COVERAGE. (a) In this section, "roof covering" means: (1) the roofing material exposed to the weather; (2) the underlayments applied for moisture protection; and (3) all flashings required in the replacement of a roof covering. (b) Subject to any applicable deductibles and the limits for the coverage purchased by the insured, a windstorm and hail insurance policy issued by the association may include replacement cost coverage for one- and two-family dwellings, including outbuildings, as provided under the dwelling extension coverage in the policy. (c) If, on the effective date of an association policy, the total amount of insurance applicable to a dwelling is equal to 80 percent or more of the full replacement cost of the dwelling or equal to the maximum amount of insurance otherwise available through the association, coverage applicable to the dwelling under the policy is extended to include the full cost of repair or replacement, without a deduction for depreciation. (d) If, on the effective date of an association policy, the total amount of insurance applicable to a dwelling is equal to less than 80 percent of the full replacement cost of the dwelling and less than the maximum amount of insurance available through the association, liability for loss under the policy may not exceed the replacement cost of the part of the dwelling that is damaged or destroyed, less depreciation. (e) Notwithstanding this chapter or any other law, the commissioner, after notice and hearing, may adopt rules to: (1) authorize the association to provide actual cash value coverage instead of replacement cost coverage on the roof covering of a building insured by the association; and (2) establish: (A) the conditions under which the association may provide that actual cash value coverage; (B) the appropriate premium reductions when coverage for the roof covering is provided on an actual cash value basis; and (C) the disclosure that must be provided to the policyholder, prominently displayed on the face of the windstorm and hail insurance policy. (f) Notwithstanding Chapter 40, a hearing under Subsection (e) shall be held before the commissioner or the commissioner's designee. (g) The commissioner may adopt rules as necessary to implement this section. Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 2, eff. April 1, 2007. Amended by: Acts 2019, 86th Leg., R.S., Ch. 525 (S.B. 615), Sec. 10, eff. September 1, 2019. Acts 2019, 86th Leg., R.S., Ch. 790 (H.B. 1900), Sec. 4, eff. June 10, 2019.