BILL ANALYSIS

H.B. 946

By: Garcia Hernandez, Cassandra

Insurance

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Under current law, automobile insurance claims can be settled through verbal agreements. This can happen when an insurance company contacts an accident victim, offers a settlement, and requests verbal acceptance in exchange for immediate payment. The bill author has informed the committee that many claimants do not realize that agreeing over the phone creates a legally binding contract, allowing insurers to resolve claims for significantly less than what a victim might obtain through a negotiated settlement.

H.B. 946 seeks to address this issue by mandating written settlement agreements for property damage or injury.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 946 amends the Insurance Code to prohibit a claimant and an insurer writing personal or commercial automobile insurance in Texas or another individual or entity from entering 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 such property damage or injury is not enforceable unless the contract is a separate written agreement. The bill defines the following terms:

· "claimant" as an insured making a first-party claim or an individual who has a claim for property damage or an injury against another individual or entity;

· "injury" as a bodily or psychological injury; and

· "oral release" as 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.

H.B. 946 applies only to a contract entered into on or after January 1, 2026. A contract entered into before that date is governed by the law as it existed immediately before the bill's effective date, and that law is continued in effect for that purpose.

EFFECTIVE DATE

September 1, 2025.