87R6300 SCL-F
By: Johnson of Dallas H.B. No. 1793
A BILL TO BE ENTITLED
AN ACT
relating to prohibiting oral releases for automobile insurance
claims.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 10, Insurance Code, is amended
by adding Chapter 1955 to read as follows:
CHAPTER 1955. ORAL RELEASES FOR AUTOMOBILE INSURANCE CLAIMS
Sec. 1955.0001. PURPOSE. The purpose of this chapter is to
protect those injured or sustaining property damage by motorists
from predatory practices engaged in by personal and commercial
automobile insurers that seek to induce injured motorists or
motorists sustaining property damage into settling and releasing
their legal claims for an amount that is insufficient to compensate
their losses at a time when these losses are not known with any
certainty, resulting in costs both to the claimant and medical
providers whose care and services may go uncompensated as a result
of those predatory insurance practices.
Sec. 1955.0002. DEFINITIONS. In this chapter:
(1) "Claimant" means an individual who has a claim for
property damage or an injury against another individual or an
entity.
(2) "Injury" means a bodily or psychological injury.
(3) "Oral release" means an oral contract under which
a claimant releases, wholly or partly, one or more of the claimant's
claims arising out of property damage or an injury for which an
insurer may be liable under an automobile insurance policy in
exchange for money or other consideration paid.
Sec. 1955.0003. APPLICABILITY OF CHAPTER. This chapter
applies to an insurer writing personal or commercial automobile
insurance in this state, including an insurance company,
corporation, reciprocal or interinsurance exchange, mutual
insurance company, county mutual insurance company, association,
Lloyd's plan, or other insurer.
Sec. 1955.0004. ORAL RELEASE OF CLAIMS PROHIBITED. A
claimant and an insurer or another individual or entity may not
enter into an oral release for claims arising out of property damage
or an injury for which an insurer may be liable under an automobile
insurance policy. A release made in exchange for money or other
consideration paid for the claimant's claim arising out of property
damage or an injury for which an insurer may be liable under an
automobile insurance policy is not enforceable unless the contract
is in writing.
SECTION 2. The changes in law made by this Act apply only to
a contract entered into on or after January 1, 2022. A contract
entered into before January 1, 2022, is governed by the law as it
existed immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2021.