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A BILL TO BE ENTITLED
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AN ACT
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relating to an appraisal process for disputed losses under personal |
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automobile or residential property insurance policies. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle A, Title 10, Insurance Code, is amended |
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by adding Chapter 1813 to read as follows: |
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CHAPTER 1813. APPRAISAL OF DISPUTED LOSSES |
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Sec. 1813.001. APPLICABILITY OF CHAPTER. (a) This chapter |
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applies only to a personal automobile or residential property |
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insurance policy delivered, issued for delivery, or renewed in this |
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state by an insurer, including: |
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(1) a capital stock insurance company; |
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(2) a mutual insurance company; |
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(3) a county mutual insurance company; |
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(4) a Lloyd's plan; |
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(5) a reciprocal or interinsurance exchange; |
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(6) a farm mutual insurance company; |
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(7) an eligible surplus lines insurer if this state is |
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the insured's home state as defined by Section 981.002; and |
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(8) the FAIR Plan Association. |
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(b) This chapter does not apply to: |
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(1) an insurance policy delivered, issued for |
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delivery, or renewed by the Texas Windstorm Insurance Association; |
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or |
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(2) a commercial insurance policy. |
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Sec. 1813.002. RULES. (a) The commissioner shall adopt |
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rules necessary to implement this chapter, including: |
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(1) rules establishing the period in which an |
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appraisal under a provision required by this chapter must be |
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completed; and |
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(2) rules mandating an appraisal for total loss and |
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damage of the property that is the subject of the appraisal. |
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(b) In adopting rules establishing the period described by |
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Subsection (a)(1), the commissioner must consider the |
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qualifications and selection of appraisers and umpires for the |
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appraisal. |
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Sec. 1813.003. REQUIRED POLICY PROVISION: APPRAISAL |
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PROCESS. (a) An insurance policy described by Section 1813.001(a) |
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must contain an appraisal provision that complies with this |
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chapter. |
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(b) The appraisal provision required by this chapter is |
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intended to provide a type of dispute resolution process solely to |
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determine the amount of loss when that amount is in dispute between |
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the policyholder and the insurer. |
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Sec. 1813.004. EFFECT OF APPRAISAL. (a) An appraisal under |
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the provision required by this chapter does not affect any |
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applicable policy terms, and an appraisal award must be made in |
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substantial compliance with the insurance policy. |
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(b) Except for fraud, accident, or material mistake |
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relevant to the appraisal or an appraisal award made without |
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authority, the amount of loss determined by an appraisal under this |
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chapter is binding as to the policyholder and the insurer. |
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SECTION 2. (a) Chapter 1813, Insurance Code, as added by |
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this Act, applies only to an insurance policy delivered, issued for |
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delivery, or renewed on or after January 1, 2026. |
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(b) An insurance policy form required to be filed under |
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Chapter 2301, Insurance Code, providing for an appraisal process |
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that is in use on September 1, 2025, and otherwise compliant with |
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Chapter 1813, Insurance Code, as added by this Act, is not required |
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to be filed with the Texas Department of Insurance as a consequence |
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of this Act. |
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SECTION 3. This Act takes effect September 1, 2025. |
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* * * * * |