Texas HB 4806: Insurance Profits Over Injury Victims

    Texas House Bill 4806 is a sweeping proposal that dramatically tilts the civil justice scales in favor of insurance companies at the expense of everyday Texans. It emerges in a year when insurers are already enjoying unprecedented financial success—in 2024, industry profits reached historic highs.1 Yet instead of easing up on consumers, these same companies deploy tactics to minimize payouts: rushing injured people into signing away their rights for a few hundred dollars, and pushing new laws to cap and slash what victims can recover. Shockingly, some who should be allies of injury victims—including a handful of plaintiff’s attorneys and medical marketing firms—have aligned with conservative tort reformers, effectively undermining Texans’ access to justice. And leading the charge is the bill’s sponsor, a Republican legislator with a long track record of anti-consumer, anti-plaintiff actions, now championing a law that could leave crash survivors and patients without the compensation they desperately need.

 

Record-Breaking Insurance Profits in 2024

    While Texas families faced rising premiums, major insurers saw windfall earnings in 2024. Berkshire Hathaway’s insurance arm (which owns GEICO) raked in enormous gains—GEICO alone reported a $7.8 billion underwriting profit, more than double its prior year’s result.2 Progressive Corporation likewise saw its fortunes soar, with full-year net income hitting $8.46 billion (up 119% from 2023).3 Even State Farm, which had suffered heavy losses in previous years, rebounded—it went from a $6.3 billion loss in 2023 to a $5.3 billion net profit in 2024.4 USAA, the Texas-based insurer serving military families, similarly returned to over $1.2 billion in profit after its first net loss in nearly a century.5

 

    In short, insurance companies are thriving. One Wall Street Journal report noted that insurers’ earnings are “hitting records” after steep premium increases.6 These record profits underscore a painful irony—the very companies now pushing HB 4806 to limit payouts are already enjoying banner financial success.

 

“Swoop and Settle” – Exploiting Victims with Lowball Offers

    Insurance giants aren’t content with just strong profits; they actively undercut injury victims’ rights at every turn. A common tactic is the quick, lowball settlement offer—often just $500 to $2,000—dangled to vulnerable people immediately after an accident. Adjusters “swoop” in within days (sometimes while the victim is still in the hospital) and urge a fast payout for “inconvenience.”7

 

    The goal is to settle before the person realizes the true extent of their injuries or consults a lawyer. For example, Progressive Insurance has been documented offering a mere $500 to an injured woman right after a crash—an amount far below her claim’s worth.8 In another case, a man was offered $500, then $1,000 for his injuries; when he insisted his harm was greater, the adjuster begrudgingly upped the offer to $1,250, still just a fraction of fair value.9

 

    These quick payouts come with strings attached—namely, a full legal release preventing any future claims.10 Many desperate victims take the tiny sum, not realizing they’ve signed away their right to seek adequate compensation for medical bills, pain, or lost wages. This “swoop and settle” strategy preys on people in crisis and saves insurers millions by shutting down rightful claims before they can even begin.

 

Allies to the Insurers: Complicit Lawyers and Medical Marketers

    One of the more disturbing facets of the push behind HB 4806 is the support it enjoys from some individuals within the personal injury industry itself. While most plaintiff attorneys and ethical medical providers fiercely oppose these anti-victim measures, a small cadre of plaintiff lawyers and medical marketers have broken ranks to side with conservative lawmakers.

 

Their motivations vary. Some may be politically aligned with other conservative measures outside of Personal Injury. Regardless of motive, the effect is the same: by supporting the conservative congressmen who adovocate for HB 4806 and similar policies, they are actively harming injury victims and undermining the civil justice system.

 

The Legislator Behind HB 4806: A History of Anti-Consumer Crusades

    HB 4806 was introduced by Rep. Greg Bonnen (R-Friendswood), a Texas lawmaker well-known for siding with insurance companies and corporate interests over consumers.11 Back in 2017, Bonnen authored HB 1774, an insurance industry-backed bill that slashed penalties for insurers who delay or lowball claims after hailstorms.12 Consumer advocates blasted the measure for tilting the playing field in favor of insurers, noting it would increase costs, delay, and risk for policyholders seeking justice.13

 

    Now, Bonnen is carrying water for the insurance industry again—HB 4806 was drafted by the powerful Texans for Lawsuit Reform lobby.14 In short, the legislator behind this bill has consistently prioritized insurance profits and corporate immunity over the rights of injured Texans.

 

Footnotes

  1. Insurance Industry Profits Surge as Rates Rise, Wall St. J. (Feb. 12, 2024). 

  2. Berkshire Hathaway Inc., Annual Report (2024). 

  3. Progressive Corp., 2024 Q4 Earnings Report (Feb. 2024). 

  4. State Farm Mutual Automobile Ins. Co., 2024 Annual Report. 

  5. USAA, 2023 Financial Report (Jan. 2024). 

  6. Insurers Reap Record Profits as Premiums Soar, Wall St. J. (Mar. 8, 2024). 

  7. The Swoop and Settle Tactic: How Insurers Lowball Injury Victims, Consumer Reports (2023). 

  8. Id. 

  9. Id. 

  10. How Insurance Adjusters Trick You Into Signing Away Your Rights, Nat’l Consumer Law Center (2023). 

  11. Tex. H.B. 4806, 89th Leg., Reg. Sess. (2024). 

  12. Tex. H.B. 1774, 85th Leg., Reg. Sess. (2017). 

  13. Consumer Groups Slam Bonnen’s Anti-Policyholder Bill, Texas Tribune (May 2017). 

  14. Texans for Lawsuit Reform: The Power Behind HB 4806, Austin Chronicle (Jan. 2024).