(a) If insurance for which a charge is included in or added to a retail installment contract is canceled, adjusted, or terminated, the holder shall, at the holder's option:
(1) apply the amount of the refund for unearned insurance premiums received by the holder to replace required insurance coverage; or
(2) credit the refund to the final maturing installments of the retail installment contract.
(b) If the amount to be applied or credited under Subsection (a) is more than the amount unpaid on the retail installment contract, the holder shall refund to the retail buyer the difference between those amounts.
(c) A cash refund is not required under this section if the amount of the refund is less than $1.
Official text of the Texas Finance Code as published by the Texas Legislative Council.