Senate Bill No. 1246, introduced by Gutierrez, aims to establish the Texas Automobile Insurance Public Option, a publicly administered auto insurance program designed to enhance affordability, accessibility, and competition within the auto insurance market while ensuring financial stability and consumer protections. The bill amends the Insurance Code by adding a new subchapter that outlines the creation and administration of the Texas Public Auto Option by the Texas Department of Insurance, in consultation with the Texas Comptroller and the Texas Transportation Commission. This program will provide mandatory liability coverage and optional comprehensive and collision coverage to eligible drivers, with specific eligibility criteria and enrollment periods established by the Commissioner.

The bill also details the coverage and premium structure, ensuring that the Texas Public Auto Option meets or exceeds minimum liability requirements and offers additional coverage options. Premiums will be set using actuarial principles to maintain affordability and market competitiveness, with provisions for low-income policyholders. Funding for the program will come from policyholder premiums and state support, with a reserve fund established for long-term sustainability. Consumer protections, including transparent claims handling and fraud prevention measures, are also emphasized. The bill mandates a biennial study to assess the program's impact on the auto insurance market and grants the Texas Department of Insurance the authority to issue necessary regulations for implementation. The changes will take effect on September 1, 2025, and apply to insurance policies issued or renewed on or after January 1, 2026.

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