Texas 2023 - 88th Regular

Texas House Bill HB597 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	88R22914 CJD-F
2	2	By: Jetton H.B. No. 597
3	3	Substitute the following for H.B. No. 597:
4	4	By: Oliverson C.S.H.B. No. 597
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to an appraisal procedure for disputed losses under
10	10	certain property and casualty insurance policies.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subtitle A, Title 10, Insurance Code, is amended
13	13	by adding Chapter 1813 to read as follows:
14	14	CHAPTER 1813. APPRAISAL PROCEDURES
15	15	SUBCHAPTER A. GENERAL PROVISIONS
16	16	Sec. 1813.001. APPLICABILITY OF CHAPTER. (a) This chapter
17	17	applies only to an insurer writing a property or casualty insurance
18	18	policy, including the FAIR Plan Association, the Texas Automobile
19	19	Insurance Plan Association, a Lloyd's plan, a reciprocal or
20	20	interinsurance exchange, a farm mutual insurance company, and a
21	21	county mutual insurance company.
22	22	(b) This chapter does not apply to the Texas Windstorm
23	23	Insurance Association.
24	24	Sec. 1813.002. RULES. The commissioner may adopt rules
25	25	necessary to implement this chapter.
26	26	Sec. 1813.003. REQUIRED POLICY PROVISION: APPRAISAL
27	27	PROCEDURE. An insurance policy described by Section 1813.001 must
28	28	contain an appraisal procedure for first-party property damage
29	29	claims that complies with this chapter.
30	30	SUBCHAPTER B. APPRAISAL PROCEDURES
31	31	Sec. 1813.051. APPRAISAL DEMAND. (a) If the policyholder
32	32	and insurer fail to agree to the amount of a loss covered by the
33	33	policy, the policyholder or insurer may provide a written demand
34	34	for an appraisal to the other party not later than the 180th day
35	35	after the date the policyholder receives the initial offer from the
36	36	insurer.
37	37	(b) The insurer must include written notification of the
38	38	180-day deadline to demand appraisal in the insurer's initial offer
39	39	to the policyholder.
40	40	(c) The policyholder and the insurer may agree in writing
41	41	not later than the 20th day after the date on which a demand for
42	42	appraisal is provided to waive any deadlines imposed by this
43	43	subchapter.
44	44	Sec. 1813.052. SELECTION OF APPRAISERS. Not later than the
45	45	20th day after the date an appraisal demand is provided under
46	46	Section 1813.051, the policyholder and insurer shall each:
47	47	(1) select a disinterested and competent appraiser;
48	48	and
49	49	(2) provide written notice to the other party of the
50	50	appraiser's identity.
51	51	Sec. 1813.053. APPRAISAL OF LOSS BY APPRAISERS; SELECTION
52	52	OF UMPIRE. (a) The appraisers shall appraise the loss that is the
53	53	subject of the appraisal not later than the 90th day after the date
54	54	both the policyholder and insurer have complied with Section
55	55	1813.052.
56	56	(b) The policyholder and insurer by agreement may twice
57	57	extend the deadline described by Subsection (a) for a period not to
58	58	exceed 60 days each time.
59	59	(c) If the appraisers agree on the amount of the loss:
60	60	(1) the appraisers shall provide written notice of the
61	61	agreement to the policyholder and insurer; and
62	62	(2) the agreed amount is set as the amount of the loss.
63	63	(d) If the appraisers fail to agree on the amount of the
64	64	loss, the appraisers shall select a competent and impartial umpire.
65	65	If the appraisers do not agree on an umpire before the 20th day
66	66	after the deadline for the appraisers to determine the amount of the
67	67	loss under this section, a judge of a court in the county in which
68	68	the policyholder resides or where the property is located shall
69	69	select the umpire on the request of the policyholder or insurer. The
70	70	policyholder or insurer shall provide at least 10 days' notice of
71	71	the request to the other party before the request is submitted to
72	72	the court.
73	73	(e) After the umpire is selected under Subsection (d), the
74	74	appraisers shall provide written notice to the umpire that
75	75	includes:
76	76	(1) the amount each appraiser sets for the loss; and
77	77	(2) any supporting documentation.
78	78	Sec. 1813.054. APPRAISAL DETERMINATION. (a) The umpire
79	79	shall present a draft award to both appraisers not later than the
80	80	30th day after the date the umpire receives the notice described by
81	81	Section 1813.053(e) from each appraiser. The umpire shall set the
82	82	amount of loss by agreement of either appraiser with the umpire's
83	83	draft award.
84	84	(b) If neither appraiser agrees to the umpire's draft award
85	85	on or before the 15th day after the date on which the appraisers are
86	86	presented the draft award, the umpire shall, not later than the 15th
87	87	day after the date of that deadline, revise the award in an attempt
88	88	to reach an agreement with either appraiser.
89	89	(c) The umpire shall continue revising the award every 15
90	90	days until an agreement is reached with at least one of the
91	91	appraisers.
92	92	(d) The umpire may not remove or reduce any items to which
93	93	both appraisers previously agreed.
94	94	(e) By agreement, the policyholder and insurer may extend
95	95	the deadline described by Subsection (a) for a period not to exceed
96	96	60 days.
97	97	(f) On reaching an agreement on the amount of the loss as
98	98	described by this section, the umpire shall provide a written
99	99	determination to the policyholder and insurer that:
100	100	(1) sets the amount of the loss; and
101	101	(2) is signed by the umpire and the appraiser with whom
102	102	the umpire reached the agreement.
103	103	(g) A determination provided under this section does not
104	104	prevent either party from pursuing its rights under the policy or
105	105	law.
106	106	Sec. 1813.055. APPRAISAL EXPENSES. The policyholder and
107	107	insurer shall equally divide and pay the umpire's expenses, as
108	108	applicable, and all other appraisal expenses.
109	109	Sec. 1813.056. EFFECT OF APPRAISAL. (a) The appraisal does
110	110	not affect any applicable policy terms, including deductibles.
111	111	(b) The appraisal decision on the amount of loss is binding,
112	112	and the use of the appraisal procedure is not a condition precedent
113	113	to bringing an action for a violation of this code, for a breach of
114	114	contract, or for any other common-law or statutory remedy.
115	115	SECTION 2. Chapter 1813, Insurance Code, as added by this
116	116	Act, applies only to an insurance policy delivered, issued for
117	117	delivery, or renewed on or after January 1, 2024.
118	118	SECTION 3. This Act takes effect September 1, 2023.