| |
| |
|
|
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 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. 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. |