Texas Senate Bill SB1246

Texas 2025 - 89th Regular

• Filed: 2/12/25

Caption

Relating to auto insurance regulation, including the creation of the Texas Automobile Insurance Public Option.

Impact

If enacted, SB1246 would have a significant impact on auto insurance regulations in Texas, particularly by establishing an alternative to private insurance options. The bill mandates the Texas Department of Insurance to create and oversee this public auto insurance option, which is intended to address the needs of low-income policyholders through a sliding scale for premiums and a reserve fund to maintain financial stability. Such measures could lead to a decrease in auto insurance costs for many drivers across the state, ultimately reducing the number of uninsured motorists.

Summary

SB1246, known as the Texas Automobile Insurance Public Option Act, seeks to establish a publicly administered auto insurance option in Texas. The bill's main objective is to enhance the affordability and accessibility of auto insurance while promoting competition within the market. By creating this public option, the bill aims to ensure that all eligible drivers have access to necessary insurance coverage options that meet or exceed state requirements, including liability coverage and optional comprehensive and collision protection.

Contention

Debate surrounding SB1246 could center on the implications of a public auto insurance option on existing private insurance providers. Proponents assert that this initiative will foster competition in the market, potentially leading to lower premiums and better services for consumers. Conversely, critics may argue that government involvement in auto insurance could disrupt the current market dynamics and result in increased regulations that could burden private insurers. Overall, the bill brings to light fundamental questions about the role of public options in providing essential services and the balance needed to maintain a competitive insurance landscape.

Texas Constitutional Statutes Affected

Insurance Code

• Chapter 1952. Policy Provisions And Forms Forautomobile Insurance
  • Section: New Section