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RULE §5.9915Inspections

(a) The underwriting rules shall determine the inspection criteria for risks to be written by the Association. The Association may issue a policy of residential property insurance on certain types of risks without an inspection in accordance with the underwriting rules.

(b) An inspection shall be made only of property requiring an inspection to determine eligibility for Association coverage in accordance with the underwriting rules. The inspection shall be free of charge to the applicant. An inspection request may be made by the owner, his/her representative, or an agent.

(c) All inspection reports shall be in writing and shall contain the information necessary to determine eligibility for coverage pursuant to the Association's underwriting rules. After the inspection report has been completed, a copy of the completed inspection report and any photograph indicating the pertinent features of the building construction, maintenance, and occupancy shall be sent within ten days to the Association.

(d) The inspection report shall contain information describing:

  (1) occupancy,

  (2) information necessary for underwriting and rating,

  (3) construction; and

  (4) physical deficiencies.

(e) If an interior inspection is necessary to determine eligibility of property described in an application submitted to the Association, the inspector shall contact the applicant and arrange for the applicant to be present during the inspection. The inspector shall not recommend correction of physical deficiencies or advise the applicant whether the Association will provide coverage.

(f) The Association shall, as soon as practical but not to exceed thirty days after receipt of the inspection report, advise the applicant and agent of the following:

  (1) If the inspector finds that the residential property meets the underwriting rules, the Association shall notify the applicant in writing and issue a policy or binder.

  (2) The Association shall indicate to the applicant any condition charges that have been applied by the Association in accordance with §5.9917(h) of this subchapter (relating to Application, Binder, Policy Issuance, Renewal and Cancellation.)

  (3) If the residential property is not insurable based on the underwriting rules, the Association shall notify the applicant in writing why the residential property is not insurable.

(g) If, at any time, the applicant makes improvements in the residential property or its condition that the applicant believes are sufficient to make the residential property insurable, an inspector shall reinspect the residential property upon request. The applicant for residential property insurance shall be eligible for one reinspection any time within 60 days after the initial inspection. If upon reinspection the residential property meets the Association's underwriting rules, the Association shall notify the applicant in writing and issue a policy or binder.

(h) If an inspection report shows that a property has unrepaired damages or is in violation of any building, housing, air pollution, sanitation, health, fire or safety code, ordinance or rule, or if an applicant otherwise has received written notice of any violation of a code, ordinance or rule, the applicant shall submit to the Association a detailed plan that indicates the manner and estimated period of time in which the violation will be corrected or the damage repaired. The Association shall not provide coverage unless the necessary corrections are completed to the satisfaction of the Association

(i) The Association may, for cause upon information or well-founded belief, without notice to the insured at any time during the policy term, inspect an insured property for the purpose of determining whether the property meets the underwriting rules. The Association need not afford an insured the opportunity to be present during a reinspection nor furnish the insured with a copy of a reinspection report, unless requested. Reinspections may also occur:

  (1) upon change in type of occupancy, or

  (2) upon a reasonable periodic schedule.

(j) The Association may cancel or refuse to renew a policy upon the basis of the reinspection report in accordance with policy terms and this plan of operation.

Source Note: The provisions of this §5.9915 adopted to be effective May 28, 2003, 28 TexReg 4153

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