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Bill

SB 2575

Relating to recoverable depreciation for property damage claims under an insurance policy.

89th Legislature (2025) Introduced by Mayes Middleton

Texas bill adjusts insurance depreciation reimbursement rules, potentially changing claim payouts for property damage by altering recoverable depreciation calculations.

Referred to Business & Commerce
#insurance--property&casualty(i0442)
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WeVote Research Nonpartisan
Bill Summary · SB 2575

Legislative bill overview

SB 2575 modifies how insurance companies handle depreciation in property damage claims, specifically addressing "recoverable depreciation"—the portion of depreciated value that policyholders can recover after repairs. The bill adjusts the rules governing when and how insurers must reimburse this depreciation component to claimants.

Why is this important

Property damage claims involve complex depreciation calculations that directly affect how much money homeowners and business owners actually receive after losses. Changes to recoverable depreciation rules can significantly impact claim payouts and influence whether policyholders can fully restore damaged property or absorb losses themselves.

Potential points of contention

  • Insurer costs vs. policyholder protection: Expanding recoverable depreciation increases insurer payouts, which may lead to higher premiums; restricting it may leave policyholders undercompensated
  • Ambiguity in "recoverable" definition: The bill's specific mechanics matter enormously—determining which depreciation counts as "recoverable" requires careful definitions that could favor one party
  • Interaction with existing Texas law: Changes must clarify how this relates to current depreciation practices and whether it applies retroactively to pending claims

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

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