The Texas Department of Insurance (TDI) has released a working draft outlining new requirements for personal automobile and residential property insurance policies to include appraisal provisions for resolving claim disputes.
According to the draft, either the policyholder or insurer would be able to demand an appraisal to address disagreements over the amount of loss or damage. The resulting appraisal award would be binding, except in cases involving material mistakes or conflicts with state law.
The draft specifies that each party must hire its own appraiser. For residential property disputes, appraisers would have 180 days from the date of the appraisal demand to reach an agreement on damages.
If the appraisers cannot agree, an umpire must be selected, and a decision would be required within 180 days. Umpires for property claims must be an experienced engineer or architect, adjuster or public adjuster, or general contractor, according to the draft.
For personal auto insurance, the process is similar but with a shorter timeline. Appraisers would have 75 days to reach an agreement after the appraisal demand is made.
The proposed rules would not apply to commercial insurance or policies issued by the Texas Windstorm Insurance Association.
The introduction of these appraisal requirements follows a new state law enacted earlier this year. Lawmakers acted after reports surfaced that some personal auto insurers had removed the appraisal process for partial losses, despite its longstanding use in the industry. Senate Bill 458 was passed to ensure that policyholders retain access to appraisal provisions.
The Insurance Council of Texas is currently reviewing the draft regulations and consulting with its members. “Our priority is to ensure the informal draft rules align with the law as passed,” Richard Johnson, director of communications and public affairs for the ICT, said in an email.
Texas lawmakers have also passed Senate Bill 455, which mandates that surplus lines insurance contracts covering risks located entirely within the state must include an arbitration agreement.
This agreement requires that any arbitration proceedings be conducted in Texas and governed by Texas law. The new rules will apply to contracts delivered, issued, or renewed on or after Jan. 1, 2026, and are intended to anchor dispute resolution in familiar legal territory for Texas-based insureds, while still allowing some flexibility for larger, more complex risks.
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