Texas § 342.406 BORROWER'S FAILURE TO PROVIDE REQUIRED INSURANCE.

Texas Statutes

§ 342.406 — BORROWER'S FAILURE TO PROVIDE REQUIRED INSURANCE.

Texas § 342.406

Code FIFinance Code

This text of Texas § 342.406 (BORROWER'S FAILURE TO PROVIDE REQUIRED INSURANCE.) is published on Counsel Stack Legal Research, covering Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Tex. Finance Code Code Ann. § 342.406 (2026).

Text

Sec. 342.406. BORROWER'S FAILURE TO PROVIDE REQUIRED INSURANCE.

(a)If a borrower fails to obtain or maintain insurance coverage required under a loan contract or requests the lender to obtain that coverage, the lender may obtain substitute insurance coverage that is substantially equivalent to or more limited than the coverage originally required.

(b)If a loan is subject to Subchapter E, the lender may obtain insurance to cover only the interest of the lender as a secured party if the borrower does not request that the borrower's interest be covered.

(c)Insurance obtained under this section must comply with Sections 342.407 and 342.408 .

(d)The lender may add the amount advanced by the lender for insurance coverage obtained under this section to the unpaid balance of the loan contract

Free access — add to your briefcase to read the full text and ask questions with AI

Sec. 342.406. BORROWER'S FAILURE TO PROVIDE REQUIRED INSURANCE. (a) If a borrower fails to obtain or maintain insurance coverage required under a loan contract or requests the lender to obtain that coverage, the lender may obtain substitute insurance coverage that is substantially equivalent to or more limited than the coverage originally required.
(b) If a loan is subject to Subchapter E, the lender may obtain insurance to cover only the interest of the lender as a secured party if the borrower does not request that the borrower's interest be covered.
(c) Insurance obtained under this section must comply with Sections 342.407 and 342.408 .
(d) The lender may add the amount advanced by the lender for insurance coverage obtained under this section to the unpaid balance of the loan contract and may charge interest on that amount from the time it is added to the unpaid balance until it is paid. The rate of additional interest may not exceed the rate that the loan contract would produce over its full term if each scheduled payment were paid on the due date.