Texas Business and Commerce Code 27.02 – Goods or Services Paid for by Insurance Proceeds: Payment of Deductible Required
(a) In this section, “property insurance policy” has the meaning assigned by Section 707.001, Insurance Code.
(b) A contract to provide a good or service that is reasonably expected to be paid wholly or partly from the proceeds of a claim under a property insurance policy and that has a contract price of $1,000 or more must contain the following notice in at least 12-point boldfaced type: “Texas law requires a person insured under a property insurance policy to pay any deductible applicable to a claim made under the policy. It is a violation of Texas law for a seller of goods or services who reasonably expects to be paid wholly or partly from the proceeds of a property insurance claim to knowingly allow the insured person to fail to pay, or assist the insured person’s failure to pay, the applicable insurance deductible.”
Attorney's Note
Under the Texas Codes, punishments for crimes depend on the classification. In the case of this section:| Class | Prison | Fine |
|---|---|---|
| Class B misdemeanor | up to 180 days | up to $2,000 |
Terms Used In Texas Business and Commerce Code 27.02
- Contract: A legal written agreement that becomes binding when signed.
- Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
- Property: means real and personal property. See Texas Government Code 311.005
(c) A person who sells goods or services commits an offense if the person:
(1) advertises or promises to provide a good or service to an insured under a property insurance policy in a transaction in which:
(A) the good or service will be paid for by the insured from the proceeds of a property insurance claim; and
(B) the person selling the good or service will, without the insurer’s consent:
(i) pay, waive, absorb, or otherwise decline to charge or collect the amount of the insured’s deductible;
(ii) provide a rebate or credit in connection with the sale of the good or service that will offset all or part of the amount paid by the insured as a deductible; or
(iii) in any other manner assist the insured in avoiding monetary payment of the required insurance deductible; or
(2) provides a good or service to an insured under a property insurance policy knowing that the insured will pay for the good or service with the proceeds of a claim under the policy and, without the insurer’s consent:
(A) pays, waives, absorbs, or otherwise declines to charge or collect the amount of the insured’s deductible;
(B) provides a rebate or credit in connection with the sale of the good or service that offsets all or part of the amount paid by the insured as a deductible; or
(C) in any other manner assists the insured in avoiding monetary payment of the required insurance deductible.
(d) An offense under this section is a Class B misdemeanor.