Texas 2023 - 88th Regular

Texas Senate Bill SB1194 Compare Versions

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Old	New	Differences
1	1	88R1248 CJD-F
2	2	By: Zaffirini S.B. No. 1194
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to an appraisal procedure for disputed losses under
8	8	certain property and casualty insurance policies.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle A, Title 10, Insurance Code, is amended
11	11	by adding Chapter 1813 to read as follows:
12	12	CHAPTER 1813. APPRAISAL PROCEDURES
13	13	SUBCHAPTER A. GENERAL PROVISIONS
14	14	Sec. 1813.001. APPLICABILITY OF CHAPTER. (a) This chapter
15	15	applies only to an insurer writing a property or casualty insurance
16	16	policy, including the FAIR Plan Association, the Texas Automobile
17	17	Insurance Plan Association, a Lloyd's plan, a reciprocal or
18	18	interinsurance exchange, a farm mutual insurance company, and a
19	19	county mutual insurance company.
20	20	(b) This chapter does not apply to the Texas Windstorm
21	21	Insurance Association.
22	22	Sec. 1813.002. RULES. The commissioner may adopt rules
23	23	necessary to implement this chapter.
24	24	Sec. 1813.003. REQUIRED POLICY PROVISION: APPRAISAL
25	25	PROCEDURE. An insurance policy described by Section 1813.001 must
26	26	contain an appraisal procedure that complies with this chapter.
27	27	SUBCHAPTER B. APPRAISAL PROCEDURES
28	28	Sec. 1813.051. APPRAISAL DEMAND. If the policyholder and
29	29	insurer fail to agree to the amount of a loss covered by the policy,
30	30	the policyholder or insurer may provide a written demand for an
31	31	appraisal to the other party.
32	32	Sec. 1813.052. SELECTION OF APPRAISERS. Not later than the
33	33	20th day after the date an appraisal demand is provided under
34	34	Section 1813.051, the policyholder and insurer shall each:
35	35	(1) select a competent appraiser; and
36	36	(2) provide written notice to the other party of the
37	37	appraiser's identity.
38	38	Sec. 1813.053. APPRAISAL OF LOSS BY APPRAISERS; SELECTION
39	39	OF UMPIRE. (a) The appraisers shall appraise the loss that is the
40	40	subject of the appraisal not later than the 30th day after the date
41	41	both the policyholder and insurer have complied with Section
42	42	1813.052.
43	43	(b) The appraisers may extend the deadline described by
44	44	Subsection (a) for a period not to exceed 60 days on agreement by
45	45	the appraisers, policyholder, and insurer.
46	46	(c) If the appraisers agree on the amount of the loss:
47	47	(1) the appraisers shall provide written notice of the
48	48	agreement to the policyholder and insurer; and
49	49	(2) the agreed amount is set as the amount of the loss.
50	50	(d) If the appraisers fail to agree on the amount of the
51	51	loss, the appraisers shall select a competent and impartial umpire.
52	52	If the appraisers do not agree on an umpire before the 20th day
53	53	after the deadline for the appraisers to determine the amount of the
54	54	loss under this section, a judge of a court in the county in which
55	55	the policyholder resides shall select the umpire on the request of
56	56	the policyholder or insurer.
57	57	(e) After the umpire is selected under Subsection (d), the
58	58	appraisers shall provide written notice to the umpire that
59	59	includes:
60	60	(1) the amount each appraiser sets for the loss; and
61	61	(2) any supporting documentation.
62	62	Sec. 1813.054. APPRAISAL SELECTION BY UMPIRE. (a) The
63	63	umpire shall determine the amount of the loss not later than the
64	64	30th day after the date the umpire receives the notice described by
65	65	Section 1813.053(e) by selecting one of the amounts submitted to
66	66	the umpire.
67	67	(b) The umpire may extend the deadline described by
68	68	Subsection (a) for a period not to exceed 60 days on agreement by
69	69	the appraisers, policyholder, and insurer.
70	70	(c) On deciding on the amount of the loss, the umpire shall
71	71	provide a written determination to the policyholder and insurer
72	72	that:
73	73	(1) sets the amount of the loss; and
74	74	(2) is signed by the umpire and the appraiser whose
75	75	appraisal amount is selected by the umpire.
76	76	(d) A determination provided under Subsection (c) does not
77	77	prevent either party from pursuing its rights under the policy or
78	78	law.
79	79	Sec. 1813.055. APPRAISAL EXPENSES. (a) Except as provided
80	80	by Subsection (c), the party selecting an appraiser shall pay that
81	81	appraiser.
82	82	(b) Except as provided by Subsection (c), the policyholder
83	83	and insurer shall equally divide and pay the umpire's expenses, as
84	84	applicable, and all other appraisal expenses.
85	85	(c) If at the end of the appraisal process the amount of the
86	86	loss is determined to be at least $1 more than the amount of the
87	87	insurer's proposed undisputed loss statement, the insurer shall
88	88	refund the policyholder's reasonable expenses incurred as a result
89	89	of the appraisal.
90	90	Sec. 1813.056. EFFECT OF APPRAISAL. (a) The appraisal does
91	91	not affect any applicable policy terms, including deductibles.
92	92	(b) The appraisal procedure provided by this chapter is
93	93	intended to function as a liquidated damages clause, and the use of
94	94	the procedure is not a condition precedent to bringing an action for
95	95	a violation of this code, for a breach of contract, or for any other
96	96	common-law or statutory remedy.
97	97	SECTION 2. Chapter 1813, Insurance Code, as added by this
98	98	Act, applies only to an insurance policy delivered, issued for
99	99	delivery, or renewed on or after January 1, 2024.
100	100	SECTION 3. This Act takes effect September 1, 2023.