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Bill

HB 854

Relating to payment of the replacement cost of lost or damaged property under a homeowner's, renter's, or condominium owner's insurance policy.

89th Legislature (2025) Introduced by Cas Garcia Hernandez and 2 co-sponsors

Requires Texas insurance policies to reimburse full replacement costs for damaged property instead of depreciated actual cash value, shifting depreciation costs from policyholders to insurers.

Received from the House
#insurance--insurers&agents(i0425) #insurance--property&casualty(i0442) #propertyinterests--personalproperty(i0600)
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WeVote Research Nonpartisan
Bill Summary · HB 854

Legislative bill overview

HB 854 modifies Texas insurance law to require homeowner's, renter's, and condominium owner's insurance policies to pay the replacement cost of lost or damaged property rather than actual cash value (which accounts for depreciation). This shifts the financial burden of depreciation from policyholders to insurance companies when property is damaged or destroyed.

Why is this important

Insurance payouts significantly affect families' ability to recover after disasters, accidents, or theft. The difference between replacement cost and actual cash value can be substantial—a ten-year-old roof or appliance may be worth half its replacement cost. This change directly impacts how quickly and fully Texans can rebuild their lives and homes after covered losses, while also affecting insurance industry costs and premium rates.

Potential points of contention

  • Cost to insurers and consumers: Requiring replacement cost coverage increases insurer payouts, likely leading to higher premiums for all policyholders, even those who never file claims
  • Inflation and replacement cost uncertainty: As replacement costs rise with inflation, insurers face unpredictable liability exposure, potentially affecting market stability and coverage availability
  • Fairness concerns: Policyholders who maintain and replace items regularly benefit more than those with older property, raising equity questions about who bears these costs
  • Policy exclusions and limits: The bill's specific language on limits, deductibles, and exclusions isn't detailed in this summary, which could significantly affect actual consumer protection

Compiled from official sources — confirm details with the bill’s official record.

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