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“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 this Texas law for a person or business paid wholly
or partly from proceeds of a property insurance claim to knowingly al-
low the insured person to fail to pay. Or assist the insured person’s failure to pay, the applicable insurance deductible. See SECTION 2.
Business & Commerce Code is amended to read as follows: Section 27.02. “Goods or Services Paid for by Insurance Proceeds: Payment
of Deductible Required”

However, the new law provides that it is a violation of this law if a contractor:

Pays for,
Credits or Offsets or
Otherwise assists the insured in any other manner in avoiding monetary pay-
ment of the required insurance deductible or provides a good or service
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 to do so.

The new law creates a Class B misdemeanor offense of 180 days in county jail and a
fine of up to $2000, for (1) a business or person who sells goods or services to pro-
vide *such a good or service in such a prohibited manner (violating contractor), (2)
an insured (policyholder) who commits an offense if the person, in connection with a
first party claim knowingly submits or allows a claim to be submitted in violation of
subsection c, (the violation section directly above) unless the insured person promptly
notifies the insurer of the violation.

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