Tex. Finance Code § 345.201: PROPERTY INSURANCE.

(a) A holder may request or require a retail buyer to insure the property purchased or improved under a retail installment transaction, including the purchase of title insurance on real property that is involved in the retail installment contract or retail charge agreement and that is subject to a security interest of the holder, including a lien.

(b) If the property is a boat that may be enrolled or licensed as a yacht with the United States Coast Guard and subject to the maritime laws of the United States, a holder may also require a retail buyer to provide in connection with the boat:

(1) protection and indemnity insurance;

(2) longshoremen's and harbor worker's compensation insurance; and

(3) medical payments insurance.

(c) The insurance and the premiums or charges for the insurance must bear a reasonable relationship to:

(1) the amount, term, and conditions of the retail installment contract or retail charge agreement;

(2) the existing hazards or risk of loss, damage, or destruction; or

(3) the potential liability.

(d) The insurance may not:

(1) cover unusual or exceptional risks; or

(2) provide coverage not ordinarily included in policies issued to the public.

(e) The holder may include the cost of insurance provided under this section as a separate charge in the contract or agreement.

Acts 1997, 75th Leg., ch. 1008, Sec. 1, eff. Sept. 1, 1997.