HB 854

relating to payment of the replacement cost of lost or damaged
property under a homeowner's, renter's, or condominium owner's
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter A, Chapter 2002, Insurance Code, is
amended by adding Section 2002.007 to read as follows:
Sec. 2002.007.  REPLACEMENT COST COVERAGE REQUIREMENTS.  (a)
This section applies to each insurer authorized to engage in the
business of residential property insurance in this state, including
a county mutual insurance company, Lloyd's plan, and reciprocal or
(b)  A homeowner's, renter's, or condominium owner's
insurance policy that includes replacement cost coverage must
provide that in a valid claim for loss of or damage to insured
property, the insurer must make an initial payment of not less than
80 percent of the estimated cost to repair or replace the lost or
damaged dwelling or personal property minus the applicable
(c)  On documentation provided to the insurer that repair or
replacement is completed and on payment of the applicable
deductible, the insurer shall make the remaining payment due after
(d)  An insurer is not required to pay more than the total
cost to replace the lost or damaged dwelling or personal property
with property of a like kind and quality.
SECTION 2.  Section 2002.007, Insurance Code, as added by
this Act, applies only to an insurance policy delivered, issued for
delivery, or renewed on or after January 1, 2026.
SECTION 3.  This Act takes effect September 1, 2025.