According to the Legislative Budget Board (LBB), SB 1791 is not expected to have a significant fiscal impact on the State of Texas. The LBB anticipates that any administrative costs related to the implementation of the new insurance requirements—such as updates to policy forms, regulatory compliance, or oversight—can be managed within the existing budget and staffing levels of the Texas Department of Insurance.

Likewise, the bill does not pose any notable fiscal implications for local governments. Since SB 1791 deals exclusively with the regulation of private automobile insurance contracts and imposes obligations solely on insurers, it does not generate new responsibilities or financial burdens for municipal or county governments.

This assessment suggests the legislation is fiscally neutral, imposing no substantial costs on taxpayers or government entities, while still effecting policy change through the private insurance market. This is important for lawmakers concerned with budget impact or unfunded mandates.

SB 1791 addresses a real and problematic gap in Texas auto insurance law where third-party claimants are effectively denied recourse when the at-fault driver’s insurer cannot establish contact with their policyholder. Under current law, insurers are only required to non-renew the unresponsive policyholder, while the injured third party is left to shoulder the burden—either paying out of pocket, filing against their own insurance (and potentially facing increased premiums), or pursuing costly litigation without reimbursement for attorneys’ fees. SB 1791 offers a balanced solution by requiring insurers to make multiple, documented contact attempts and, if unsuccessful, pay the third-party claim in accordance with the policy and decline to renew the policyholder’s coverage.

The bill upholds liberty principles in a nuanced way. It promotes personal responsibility by ensuring policyholders engage with their insurer following a crash, and it strengthens individual liberty and property rights for third-party claimants who would otherwise face financial harm through no fault of their own. While the bill does impose a mandate on private contracts, it does so narrowly and with clear justification—seeking to remedy market failure and protect innocent parties. It also incentivizes insurers to exercise greater care in underwriting, especially for policyholders who may be less likely to cooperate after an accident.

Although earlier concerns centered on regulatory overreach and the erosion of free enterprise, our revised position recognizes that some regulation is warranted when it prevents bad-faith denials and protects equitable outcomes. On balance, SB 1791 does not broadly restructure private contracts or undermine market dynamics; rather, it establishes a fair procedural standard to ensure injured third parties are not left without remedy.

As such, Texas Policty Research recommends that lawmakers vote YES on SB 1791 as it improves fairness in auto claims, addresses a systemic issue, and encourages responsible behavior by both insured drivers and insurers, all while maintaining a focused, proportional regulatory approach.

• Individual Liberty: The bill strengthens individual liberty by ensuring that innocent third parties—people who are injured or suffer property damage through no fault of their own—have a path to fair compensation. Currently, if the at-fault driver becomes unresponsive, the insurer can deny the claim, effectively forcing the injured party to absorb the loss or pursue costly litigation. By requiring insurers to pay claims after good-faith efforts to reach their insured, the bill restores agency and remedy to those third parties, preserving their financial autonomy and rights under the law.
• Personal Responsibility: The bill promotes personal responsibility on multiple levels. First, it reinforces that insured drivers must be reachable and responsive if a claim is made against them. Ignoring the process shouldn't shield someone from consequences. Second, it holds insurers accountable for thorough, documented efforts to contact their policyholders and resolve claims fairly. It discourages passive or self-serving behavior and encourages all parties to fulfill their roles in the insurance process.
• Free Enterprise: While the bill does impose a specific provision into all personal auto policies, it does so narrowly, with a clear public benefit. It may limit insurer discretion in a small subset of cases, but it doesn’t fundamentally alter the competitive nature of the insurance market or prevent innovation. In fact, by aligning liability practices with equitable outcomes, the bill enhances trust in insurance as a product—supporting long-term market health. Any regulatory burden is limited and targeted, not sweeping or ideological.
• Private Property Rights: There is a trade-off here. The bill limits a policyholder’s ability to maintain coverage if they are non-responsive, but this is done in response to a credible liability event. Meanwhile, it upholds the property rights of third-party victims who are otherwise deprived of remedy. By requiring insurers to fulfill contractual obligations when reasonable contact has failed, the bill supports the principle that harm caused by one person should not unjustly burden another’s property or finances.
• Limited Government: Though the bill expands regulatory requirements in the insurance space, it does so with restraint and purpose. It addresses a narrow market failure without growing bureaucracy or creating new enforcement bodies. No additional rulemaking authority is granted, and the provisions are self-executing. The intervention is justified by the failure of current law to protect non-negligent third parties and is a good example of limited government stepping in only where necessary to enforce fairness.