Texas House Bill HB804

Texas 2021 - 87th Regular

Caption

Relating to an offset for amounts paid under an automobile insurance policy's personal injury protection coverage against a liability claim.

Impact

The bill also introduces a crucial stipulation where an insurer cannot claim an offset if they have not paid out the full amount of applicable liability policy limits related to the accident. This provision aims to ensure that insurance companies fully meet their obligations before they can leverage any offsets in payouts to injured parties. As a result, this could lead to more comprehensive compensation for victims, potentially reducing the financial burden on individuals who rely on their insurance for recovery from vehicular accidents.

Summary

House Bill 804 proposes modifications to the Texas Insurance Code, specifically addressing how offsets work in relation to personal injury protection (PIP) coverage under automobile insurance policies. The key amendment clarifies that if a liability claim is made by a passenger against a motor vehicle's owner or operator, the insurer is entitled to an offset against any awarded amount equal to what has already been paid to the injured party under PIP coverage. This change is designed to streamline the process of handling claims by establishing more defined parameters for offsets that can be applied in such situations.

Contention

The discussions leading up to the proposal of this bill reveal varying opinions on its implications. Proponents of HB 804 argue that it promotes fairness by preventing insurers from reducing their payout responsibilities arbitrarily while still ensuring protection for the insured individuals. Critics, however, may express concern about potential loopholes that could allow for manipulation in claims processing and remind stakeholders about the importance of thorough oversight in insurance practices to avoid unjust outcomes for claimants.