Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 5 - PROPERTY AND CASUALTY INSURANCE › Subchapter F - INLAND MARINE INSURANCE, MULTI-PERIL INSURANCE, AND COMMERCIAL LINES › Division 1 - INLAND MARINE INSURANCE › Section 5.5006 - Inland Marine Insurance - Consumer Credit Property Insurance

Current through Reg. 49, No. 28; July 12, 2024
Consumer credit property insurance (filed). These
						policies provide property coverage for an open- or closed-end consumer credit
						transaction that is a retail installment transaction. For purposes of this
						section, "retail installment transaction" has the meaning assigned in Finance
						Code §
											345.001, concerning
						Definitions.
(1) Policies must include
					 coverage while in transit.
(2)
					 Policies may extend coverage to include vendee, mortgagor, or lessee
					 interests.
(3) Policies may not
					 cover a vendor's, mortgagee's, or lessor's interest beyond the termination of
					 that interest.
(4) All policies or
					 certificates must include a clear statement to the insured about how payments
					 will be allocated to all outstanding purchase obligations. The statement must
					 reference the applicable lending documents to determine how the coverage will
					 be applied.
(5) Premium
					 calculations for coverage involving a closed-end consumer credit transaction
					 may not be based on amounts paid for services, meals, entertainment, finance or
					 service fees, loan interest, delivery charges, or other insurance premiums (for
					 example, credit life, credit disability, credit property, or credit involuntary
					 unemployment insurance coverage).
(6) Offers for coverage involving a
					 closed-end consumer credit transaction must include, at the time of the offer,
					 the following prominent written disclosure in no smaller than 10-point boldface
					 type: "This coverage might duplicate existing coverage if you have a
					 residential property insurance policy. This coverage ceases when you have fully
					 paid the debt. This coverage is primary, so it is the first source to be used
					 in the event of a loss on property it covers. You may cancel this coverage at
					 any time by calling the insurer at the toll-free telephone number provided to
					 you, or by writing to the insurer. This coverage costs {set out the total
					 identifiable credit property insurance charge}."
(7) Offers for coverage involving an open-end
					 consumer credit transaction must include, at the time of the offer, the
					 following prominent written disclosure in no smaller than 10-point boldface
					 type: "This coverage might duplicate existing coverage if you have a
					 residential property insurance policy. It applies to any item of covered
					 property on which you owe a debt. This coverage is primary, so it is the first
					 source to be used in the event of a loss on property it covers. You may cancel
					 this coverage at any time by calling the insurer at the toll-free telephone
					 number provided to you, or by writing to the insurer. This coverage costs
					 ${enter amount} per $100 of outstanding balance on your account. The premium
					 charged for this coverage is based on your entire outstanding balance, but the
					 coverage only applies to tangible personal property purchased on an open-end
					 credit account. Services, meals or other consumables, entertainment, finance or
					 service fees, loan interest, delivery charges, or other insurance premiums,
					 which may be part of your outstanding balance, are not covered."
(8) Policies or certificates must be given to
					 the insured when the coverage is accepted by the insurer, along with written
					 instructions about filing claims under the coverage.
(A) The instructions must include the
					 insurer's toll-free telephone number. The instructions must list the essential
					 elements an insured must provide to perfect a claim.
(B) Policies or certificates given to
					 insureds must include the disclosure in either paragraph (6) or (7) of this
					 section, as applicable, with the same typeface and size requirements.