HBA-TBM H.B. 1461 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1461 By: Moreno, Joe E. Insurance 3/11/2001 Introduced BACKGROUND AND PURPOSE Currently, there are few insurers that offer a replacement cost homeowners insurance policy that provides coverage below 80 percent of the home's value. If the home is insured for at least 80 percent of the full replacement value, then the insurer will pay the full cost of any partial loss. For those companies that offer a policy that covers a home below 80 percent, the insurer will pay only part of the expense of a partial loss, which is the penalty for being underinsured. House Bill 1461 requires insurers to offer replacement coverage at any percentage designated by the homeowner at the time the policy is purchased. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the commissioner of insurance in SECTION 1 (Art. 5.35-2, Insurance Code) of this bill. ANALYSIS House Bill 1461 amends the Insurance Code to provide that an insurer writing homeowners insurance in this state must offer a policy that provides coverage for the percentage, not to exceed 100 percent, of a home's market or replacement value that the homeowner designates at the time the policy is purchased. The bill requires the commissioner of insurance to adopt rules as necessary to implement these provisions. The bill does not affect any right of a person who holds a lien on a home to require a homeowner to obtain homeowners insurance coverage in an amount specified by the lien holder. An insurer is not required to comply with this Act until September 1, 2002. The commissioner shall adopt all rules necessary to implement this Act not later than January 1, 2002. EFFECTIVE DATE September 1, 2001.