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Texas Lawmakers Look To Stop 'Swoop And Settle' Insurance Tactic Used After Car Accidents

COLLIN COUNTY, Texas (CBSDFW.COM) - Just hours after 18-year-old Rayza Dominguez was involved in a rear-end car crash in Frisco, the phone rang.

It was the other driver's insurance company.

The insurance company told Dominguez it wanted to get money into her hands quickly so she could repair her car.

Over the phone, Dominguez was offered $1,000.

She said, "yes,"

"[The insurance representative] said if you don't take this now, I can't guarantee you that we'll offer you this much in the future," Dominguez said. "For me that was a lot of money at that time so I said 'okay, I'll just take it.'"

A few days later, Dominguez said she found out it would cost nearly $2,400 to repair her car and that she needed to see a chiropractor as a result of the accident.

But by saying "yes" over the phone to the insurance company, Dominguez had already legally settled her claim.

There was nothing she could do to get more money from the insurance company.

"The game was already over when she came to see us," said attorney Lin McCraw. "The reality is there was very little we could do to help her. I hate telling people that and it's one of the reasons that I think it's incredibly important for lawyers to report this abuse."

McCraw, along with consumer advocates, are lobbying Texas lawmakers to protect motorist from the insurance practice often referred to as "swoop and settle."

Texas House Bill 1793, authored by Rep. Julie Johnson (D- Irving), would outlaw oral automotive insurance releases.

If it passes, insurance companies would have to put all automotive insurance settlements in writing.

"What this does is it gives you an opportunity to stop and think about what you're doing before you sign away your rights," said Ware Wendell, the executive director of the nonprofit group Texas Watch.

"You may decide that now is the time to settle on your claim. That's your choice, but at least you don't just say 'yes' over the phone and give away your rights before you've even had a chance to go to the doctor."

Insurance companies say outlawing oral claim releases will slow down drivers getting their money.

"This is a practice that we've had for a while and it works," said Beaman Floyd with the Texas Coalition for Affordable Insurance Solutions.

Floyd said claim releases done over the phone are only offered in simple minor accidents as a way to quickly resolve an insurance claim, allowing everyone involved to move on with their lives.

"In those instances that are clear cut, everybody wants to drive away from it with one person saying, 'Wow, I'm getting a check and I'm really happy about it' and the other person saying, 'Wow, I don't have to worry about that'."

Dominguez said that wasn't the case for her and regrets saying "yes."

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