Section 342.401 - Required Property Insurance(a) On a loan that is subject to Subchapter E with a cash advance of $300 or more, a lender may require a borrower to insure tangible personal property offered as security for the loan.(b) On a secondary mortgage loan, a lender may require a borrower to provide property insurance as security against reasonable risks of loss, damage, and destruction.(c) The insurance coverage and the premiums or charges for the coverage must bear a reasonable relationship to: (1) the amount, term, and conditions of the loan;(2) the value of the collateral; and(3) the existing hazards or risk of loss, damage, or destruction.(d) The insurance may not: (1) cover unusual or exceptional risks; or(2) provide coverage not ordinarily included in policies issued to the general public.(e) A creditor may not require the purchase of duplicate property insurance if the creditor has knowledge that the borrower:(1) has valid and collectible insurance covering the property; and(2) has provided a loss payable endorsement sufficient to protect the creditor.(f) For purposes of determining the knowledge required under Subsection (e), a creditor may rely on a written consent to purchase insurance in which the borrower is given the opportunity to disclose the existence of other coverage.Amended by Acts 1999, 76th Leg., ch. 62, Sec. 7.19(a), eff. 9/1/1999Amended By Acts 1999, 76th Leg., ch. 909, Sec. 2.16, eff. 9/1/1999.