| 1 | 1 | | By: Garcia Hernandez H.B. No. 946 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | A BILL TO BE ENTITLED |
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| 7 | 7 | | AN ACT |
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| 8 | 8 | | relating to prohibiting oral releases for automobile insurance |
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| 9 | 9 | | claims. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Subtitle C, Title 10, Insurance Code, is amended |
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| 12 | 12 | | by adding Chapter 1955 to read as follows: |
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| 13 | 13 | | CHAPTER 1955. ORAL RELEASES FOR AUTOMOBILE INSURANCE CLAIMS |
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| 14 | 14 | | Sec. 1955.001. DEFINITIONS. In this chapter: |
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| 15 | 15 | | (1) "Claimant" means: |
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| 16 | 16 | | (A) an insured making a first-party claim; or |
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| 17 | 17 | | (B) an individual who has a claim for property |
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| 18 | 18 | | damage or an injury against another individual or an entity. |
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| 19 | 19 | | (2) "Injury" means a bodily or psychological injury. |
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| 20 | 20 | | (3) "Oral release" means an oral contract under which |
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| 21 | 21 | | a claimant releases, wholly or partly, one or more of the claimant's |
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| 22 | 22 | | claims arising out of property damage or an injury for which an |
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| 23 | 23 | | insurer may be liable under an automobile insurance policy in |
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| 24 | 24 | | exchange for money or other consideration paid. |
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| 25 | 25 | | Sec. 1955.002. APPLICABILITY OF CHAPTER. This chapter |
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| 26 | 26 | | applies to an insurer writing personal or commercial automobile |
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| 27 | 27 | | insurance in this state, including an insurance company, |
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| 28 | 28 | | corporation, reciprocal or interinsurance exchange, mutual |
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| 29 | 29 | | insurance company, county mutual insurance company, association, |
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| 30 | 30 | | Lloyd's plan, or other insurer. |
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| 31 | 31 | | Sec. 1955.003. ORAL RELEASE OF CLAIMS PROHIBITED. |
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| 32 | 32 | | Notwithstanding Section 26.01, Business & Commerce Code, a claimant |
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| 33 | 33 | | and an insurer or another individual or entity may not enter into an |
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| 34 | 34 | | oral release for claims arising out of property damage or an injury |
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| 35 | 35 | | for which an insurer may be liable under an automobile insurance |
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| 36 | 36 | | policy. A release made in exchange for money or other consideration |
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| 37 | 37 | | paid for the claimant's claim arising out of property damage or an |
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| 38 | 38 | | injury for which an insurer may be liable under an automobile |
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| 39 | 39 | | insurance policy is not enforceable unless the contract is a |
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| 40 | 40 | | separate written agreement. |
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| 41 | 41 | | SECTION 2. The changes in law made by this Act apply only to |
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| 42 | 42 | | a contract entered into on or after January 1, 2026. A contract |
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| 43 | 43 | | entered into before January 1, 2026, is governed by the law as it |
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| 44 | 44 | | existed immediately before the effective date of this Act, and that |
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| 45 | 45 | | law is continued in effect for that purpose. |
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| 46 | 46 | | SECTION 3. This Act takes effect September 1, 2025. |
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