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.