H.B. No. 3048
AN ACT
relating to insurance coverage for certain structures.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 3(f), Article 21.49, Insurance Code, is
amended to read as follows:
(f) "Insurable Property" means immovable property at fixed
locations in a catastrophe area or corporeal movable property
located therein (as may be designated in the plan of operation)
which property is determined by the Association, pursuant to the
criteria specified in the plan of operation to be in an insurable
condition against windstorm, hail and/or fire and explosion as
appropriate, as determined by normal underwriting standards;
provided, however, that insofar as windstorm and hail insurance is
concerned, any structure located within a catastrophe area,
commenced on or after the 30th day following the publication of the
plan of operation, not built or continuing in compliance with
building specifications set forth in the plan of operation shall
not be an insurable risk under this Act except as otherwise provided
under this Act. A structure, or an addition thereto, which is
constructed in conformity with plans and specifications that comply
with the specifications set forth in the plan of operation at the
time construction commences shall not be declared ineligible for
windstorm and hail insurance as a result of subsequent changes in
the building specifications set forth in the plan of operation.
Except as otherwise provided by this subsection, if repair of
damage to a structure involves replacement of items covered in the
building specifications as set forth in the plan of operation, such
repairs must be completed in a manner to comply with such
specifications for the structure to continue within the definition
of Insurable Property for windstorm and hail insurance. If repair
to a structure, other than a roof repair that exceeds 100 square
feet, is less than five percent of the amount of total property
coverage on the structure, the repairs may be completed in a manner
that returns the structure to its condition immediately before the
loss without affecting the eligibility of the structure to qualify
as insurable property. Nothing in this Act shall preclude special
rating of individual risks as may be provided in the plan of
operation. For purposes of this Act, all residential structures,
other than a condominium, apartment, duplex, or other multifamily
residence, or a hotel or resort facility, which are located within
those areas designated as units under the federal Coastal Barrier
Resources Act (Public Law 97-348) and for which a building permit or
plat has been filed with the municipality, the county, or the United
States Army Corps of Engineers before June 11, 2003 [the effective
date of S.B. No. 14, Acts of the 78th Legislature, Regular Session,
2003], are insurable property. "Insurable Property" includes
property described by Section 3A of this article.
SECTION 2. Article 21.49, Insurance Code, is amended by
adding Section 3A to read as follows:
Sec. 3A. COVERAGE FOR CERTAIN PROPERTY LOCATED OVER WATER.
(a) A policy of windstorm and hail insurance issued by the
association may include coverage for:
(1) a building or other structure located in the
seacoast territory that is built wholly or partially over water;
and
(2) the corporeal movable property contained in a
building or structure described by Subdivision (1) of this
subsection.
(b) The association may impose appropriate limits of
coverage and deductibles for coverage described by Subsection (a)
of this section.
(c) The board of directors of the association shall submit
any proposed changes to the plan of operation necessary to
implement Subsections (a) and (b) of this section to the
commissioner in the manner provided by Section 5(c) of this
article.
(d) The commissioner shall adopt rules as necessary to
implement this section, including any rules necessary to implement
changes in the plan of operation proposed under Subsection (c) of
this section.
SECTION 3. Article 21.49A, Insurance Code, is amended by
adding Section 5A to read as follows:
Sec. 5A. COVERAGE FOR WINDSTORM AND HAIL INSURANCE;
COVERAGE FOR CERTAIN PROPERTY LOCATED OVER WATER. (a) A policy
issued by the association may include coverage against loss or
damage by windstorm or hail for:
(1) a building or other structure that is built wholly
or partially over water; and
(2) the corporeal movable property contained in a
building or structure described by Subdivision (1) of this
subsection.
(b) The association may impose appropriate limits of
coverage and deductibles for coverage described by Subsection (a)
of this section.
(c) The governing committee of the association shall submit
any proposed changes to the plan of operation necessary to
implement Subsections (a) and (b) of this section to the
commissioner for the approval of the commissioner in the manner
provided by Section 3(a) of this article.
(d) The commissioner shall adopt rules as necessary to
implement this section, including any rules necessary to implement
changes in the plan of operation proposed under Subsections (a) and
(b) of this section.
SECTION 4. Section 911.151, Insurance Code, is amended by
adding Subsections (c) and (d) to read as follows:
(c) An insurance policy written by a farm mutual insurance
company against loss or damage by windstorm, hurricane, or hail, as
described by Subsection (a), may include coverage for:
(1) a building or other structure that is built wholly
or partially over water; and
(2) the corporeal movable property contained in a
building or structure described by Subdivision (1).
(d) The farm mutual insurance company may impose
appropriate limits of coverage and deductibles for coverage
described by Subsection (c).
SECTION 5. Section 912.151, Insurance Code, is amended by
adding Subsections (d) and (e) to read as follows:
(d) An insurance policy written by a county mutual insurance
company against loss or damage by windstorm or hail, as described by
Subsection (a), may include coverage for:
(1) a building or other structure that is built wholly
or partially over water; and
(2) the corporeal movable property contained in a
building or structure described by Subdivision (1).
(e) The county mutual insurance company may impose
appropriate limits of coverage and deductibles for coverage
described by Subsection (d).
SECTION 6. Subchapter B, Chapter 5, Insurance Code, is
amended by adding Article 5.14 to read as follows:
Art. 5.14. COVERAGE FOR CERTAIN LOSS OR DAMAGE CAUSED BY
WINDSTORM, HURRICANE, OR HAIL. (a) In this article, "insurer" has
the meaning assigned by Section 3, Article 5.13-2, of this code.
(b) An insurance policy written by an insurer against loss
or damage by windstorm, hurricane, or hail may include coverage
for:
(1) a building or other structure that is built wholly
or partially over water; and
(2) the corporeal movable property contained in a
building or structure described by Subdivision (1) of this
subsection.
(c) An insurer that writes coverage described by Subsection
(b) of this section may impose appropriate limits of coverage and
deductibles for the coverage described by Subsection (b).
SECTION 7. (a) Except as provided by Subsection (b) of this
section, Article 21.49, Insurance Code, as amended by this Act,
applies only to a policy of windstorm or hail insurance that is
delivered, issued for delivery, or renewed on or after January 1,
2006. A policy that is delivered, issued for delivery, or renewed
before January 1, 2006, is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
(b) If it is determined by the board of directors of the
Texas Windstorm Insurance Association that an amendment to the
association's plan of operation is required before Section 3A,
Article 21.49, Insurance Code, as added by this Act, may be
implemented, Section 3A, Article 21.49, Insurance Code, as added by
this Act:
(1) takes effect on the 30th day after the date of the
adoption of rules by the commissioner of insurance amending the
plan of operation appropriately; and
(2) applies only to a policy of windstorm or hail
insurance that is delivered, issued for delivery, or renewed on or
after the 90th day after the date rules are adopted as described by
Subdivision (1) of this subsection.
SECTION 8. (a) Except as provided by Subsection (b) of this
section, Article 21.49A, Insurance Code, as amended by this Act,
applies only to a policy of windstorm or hail insurance that is
delivered, issued for delivery, or renewed on or after January 1,
2006. A policy that is delivered, issued for delivery, or renewed
before January 1, 2006, is governed by the law as it existed
immediately before the effective date of this Act, and that law is
continued in effect for that purpose.
(b) If it is determined by the governing committee of the
FAIR Plan Association that an amendment to the association's plan
of operation is required before Section 5A, Article 21.49A,
Insurance Code, as added by this Act, may be implemented, Section
5A, Article 21.49A, Insurance Code, as added by this Act:
(1) takes effect on the 90th day after the date of the
adoption of rules by the commissioner of insurance amending the
plan of operation appropriately; and
(2) applies only to a policy of windstorm or hail
insurance that is delivered, issued for delivery, or renewed on or
after the 180th day after the date rules are adopted as described by
Subdivision (1) of this subsection.
SECTION 9. Sections 911.151 and 912.151, Insurance Code, as
amended by this Act, and Article 5.14, Insurance Code, as added by
this Act, apply only to a policy of insurance that is delivered,
issued for delivery, or renewed on or after January 1, 2006. A
policy that is delivered, issued for delivery, or renewed before
January 1, 2006, is governed by the law as it existed immediately
before the effective date of this Act, and that law is continued in
effect for that purpose.
SECTION 10. This Act takes effect September 1, 2005.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3048 was passed by the House on May
12, 2005, by a non-record vote.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3048 was passed by the Senate on May
25, 2005, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor