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A BILL TO BE ENTITLED
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AN ACT
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relating to an appraisal procedure for disputed losses under |
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personal automobile insurance policies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 1952, Insurance Code, is amended by |
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adding Subchapter I to read as follows: |
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SUBCHAPTER I. APPRAISAL PROCEDURES |
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Sec. 1952.401. APPLICABILITY OF SUBCHAPTER. This |
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subchapter applies to an insurer writing personal automobile |
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insurance in this state, including an insurance company, |
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corporation, reciprocal or interinsurance exchange, mutual |
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insurance company, capital stock company, association, county |
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mutual insurance company, Lloyd's plan, and any other insurer. |
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Sec. 1952.402. REQUIRED POLICY PROVISION: APPRAISAL |
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PROCEDURE. A personal automobile insurance policy must contain an |
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appraisal procedure that complies with this subchapter. |
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Sec. 1952.403. APPRAISAL DEMAND; APPOINTMENT OF |
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APPRAISERS. (a) An insurer or the named insured may demand an |
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appraisal not later than the 90th day after the insurer accepts |
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liability and issues the insurer's undisputed liability offer. |
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(b) Each party shall appoint an unbiased appraiser and |
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notify the other party of that appraiser's identity not later than |
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the 15th day after the date an appraisal is demanded. |
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Sec. 1952.404. DETERMINATION OF LOSS. (a) The appraisers |
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appointed by the parties shall determine the amount of loss. |
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(b) If the appraisers fail to agree on the amount of loss |
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after the 30th day after the date all appraisers are appointed, the |
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appraisers shall select an unbiased umpire. The appraisers and |
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umpire shall determine the amount of loss not later than the 30th |
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day after the date the umpire is selected. |
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(c) The determination of the amount of loss agreed to by |
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both appraisers or by one appraiser and the umpire is binding on |
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both parties. |
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Sec. 1952.405. COURT SELECTION OF UMPIRE. If the two |
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appraisers are unable to agree on an umpire on or before the 15th |
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day after the date the appraisers determine an umpire is needed, the |
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insurer or the named insured may request that a court in the county |
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in which the named insured resides select the umpire. |
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Sec. 1952.406. APPRAISAL FEES AND EXPENSES. (a) Each party |
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is responsible for its own appraiser's fees and expenses. |
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(b) If at the end of the appraisal process the amount of loss |
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is determined to be more than 10 percent greater than the amount of |
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the insurer's last offer, the insurer shall refund the named |
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insured's reasonable out-of-pocket expenses for the insured's |
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appraiser's fees and expenses. |
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(c) If at the end of the appraisal process the appraisal |
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award is more than 10 percent less than the amount the insurer last |
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offered, the named insured shall pay the insurer's appraiser's |
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reasonable fees and expenses. |
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(d) All other appraisal expenses, including umpire |
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expenses, are shared evenly between the parties. |
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Sec. 1952.407. NO RIGHTS WAIVED. An insurer and a named |
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insured do not waive any rights under the policy that is the subject |
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of the appraisal by demanding an appraisal. |
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SECTION 2. The change in law made by this Act applies only |
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to an insurance policy that is delivered, issued for delivery, or |
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renewed on or after January 1, 2026. |
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SECTION 3. This Act takes effect September 1, 2025. |