By: Garcia Hernandez H.B. No. 946
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. 1955.001. DEFINITIONS. In this chapter:
(1) "Claimant" means:
(A) an insured making a first-party claim; or
(B) 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. 1955.002. 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. 1955.003. ORAL RELEASE OF CLAIMS PROHIBITED.
Notwithstanding Section 26.01, Business & Commerce Code, 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 a
separate written agreement.
SECTION 2. The changes in law made by this Act apply only to
a contract entered into on or after January 1, 2026. A contract
entered into before January 1, 2026, 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, 2025.