Texas Finance Code - FIN § 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,  1 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.