Texas 2025 - 89th Regular

Texas House Bill HB345 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R1891 CJD-F
2	2	By: Perez of Harris H.B. No. 345
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to an appraisal process for disputed losses under
10	10	residential property insurance policies.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subtitle D, Title 10, Insurance Code, is amended
13	13	by adding Chapter 2009 to read as follows:
14	14	CHAPTER 2009. APPRAISAL PROCESS FOR RESIDENTIAL PROPERTY INSURANCE
15	15	SUBCHAPTER A. GENERAL PROVISIONS
16	16	Sec. 2009.001. APPLICABILITY OF CHAPTER. (a) This chapter
17	17	applies only to an insurer writing a residential property insurance
18	18	policy, including:
19	19	(1) a capital stock insurance company;
20	20	(2) a mutual insurance company;
21	21	(3) a county mutual insurance company;
22	22	(4) a Lloyd's plan;
23	23	(5) a reciprocal or interinsurance exchange;
24	24	(6) a farm mutual insurance company;
25	25	(7) an eligible surplus lines insurer if this state is
26	26	the insured's home state as defined by Section 981.002; and
27	27	(8) the FAIR Plan Association.
28	28	(b) This chapter does not apply to:
29	29	(1) the Texas Windstorm Insurance Association; or
30	30	(2) a commercial insurance policy.
31	31	Sec. 2009.002. RULES. The commissioner may adopt rules
32	32	necessary to implement this chapter.
33	33	Sec. 2009.003. REQUIRED POLICY PROVISION: APPRAISAL
34	34	PROCESS. (a) Any appraisal provision contained in an insurance
35	35	policy described by Section 2009.001 must comply with this chapter.
36	36	(b) The requirements of this chapter control over terms of
37	37	an insurance policy and other law only with respect to the specific
38	38	issues addressed in this chapter. All other terms and conditions of
39	39	the appraisal process remain subject to the terms of the insurance
40	40	policy and applicable law.
41	41	(c) The provisions of this chapter are not the sole
42	42	provisions that may be included in an appraisal process provided in
43	43	an insurance policy. Subject to any other provision of law, a policy
44	44	may include any other provision not in direct conflict with this
45	45	chapter.
46	46	(d) This chapter does not alter or provide an exception to
47	47	the prompt payment of claims deadlines under Subchapter B, Chapter
48	48	542.
49	49	SUBCHAPTER B. APPRAISAL PROCESS
50	50	Sec. 2009.051. APPRAISAL DEMAND. (a) If the policyholder
51	51	and insurer fail to agree to the amount of loss covered by the
52	52	policy, the policyholder or insurer may provide a written demand
53	53	for appraisal to the other party.
54	54	(b) The policyholder may not demand appraisal after the
55	55	policyholder files a lawsuit asserting the claim that is the basis
56	56	for the appraisal demand.
57	57	(c) The insurer may not demand appraisal after filing the
58	58	insurer's original answer to the lawsuit.
59	59	(d) The insurer may incorporate a demand for appraisal with
60	60	the insurer's original answer to the lawsuit.
61	61	(e) If the policyholder files a lawsuit and the insurer
62	62	subsequently demands appraisal, the lawsuit may be abated until the
63	63	appraisal process is complete, provided that the insurer has not:
64	64	(1) denied the claim; or
65	65	(2) reserved the right to dispute coverage following
66	66	the appraisal process.
67	67	Sec. 2009.052. SELECTION OF APPRAISERS. Not later than the
68	68	20th day after the date an appraisal demand is provided under
69	69	Section 2009.051, the policyholder and insurer shall each:
70	70	(1) select a competent and impartial appraiser; and
71	71	(2) provide written notice to the other party of the
72	72	appraiser's identity.
73	73	Sec. 2009.053. APPRAISAL OF LOSS BY APPRAISERS; SELECTION
74	74	OF UMPIRE. (a) The appraisers shall appraise the loss that is the
75	75	subject of the appraisal not later than the 30th day after the date
76	76	both the policyholder and insurer have complied with Section
77	77	2009.052.
78	78	(b) The appraisers may extend the deadline described by
79	79	Subsection (a) for a period not to exceed 30 days on written
80	80	agreement by the appraisers, policyholder, and insurer.
81	81	(c) If the appraisers agree on the amount of loss:
82	82	(1) the appraisers shall issue their award and provide
83	83	written notice of the award to the policyholder and insurer; and
84	84	(2) the agreed amount as stated in the appraisal award
85	85	is the amount of loss.
86	86	(d) If the appraisers fail to agree on the amount of loss,
87	87	the appraisers shall select a competent and impartial umpire. If
88	88	the appraisers do not agree on an umpire after the 20th day after
89	89	the deadline for the appraisers to determine the amount of loss
90	90	under this section, the umpire must be selected:
91	91	(1) by a policy provision, if applicable, that
92	92	provides for the method of selecting an umpire; or
93	93	(2) on written request by either party to a court
94	94	described by Subsection (e).
95	95	(e) A policy provision may provide that a competent and
96	96	impartial umpire may be selected by a judge of a district court,
97	97	county court at law, or constitutional county court in the county in
98	98	which the policyholder resides or where the property is located.
99	99	(f) A party requesting court appointment of an umpire must
100	100	provide the other party with 10 days' written notice of the intent
101	101	to submit the request. The appointment may not be made on an ex
102	102	parte basis without both parties having an opportunity to appear
103	103	before the court.
104	104	(g) After the umpire is selected under Subsection (d) or
105	105	(e), each appraiser shall provide written notice to the umpire and
106	106	the other appraiser that includes:
107	107	(1) the appraiser's determination as to the amount of
108	108	loss;
109	109	(2) any supporting documentation; and
110	110	(3) an itemized list of the disputed differences
111	111	between the appraisers regarding the amount of loss.
112	112	Sec. 2009.054. AMOUNT OF LOSS DETERMINATION BY UMPIRE. (a)
113	113	The umpire shall determine the amount of loss by selecting:
114	114	(1) one of the amounts of loss submitted to the umpire;
115	115	or
116	116	(2) an amount in between the two amounts submitted to
117	117	the umpire.
118	118	(b) The umpire must select an amount under Subsection (a)
119	119	not later than the 30th day after the date the umpire receives the
120	120	submissions of both appraisers.
121	121	(c) The umpire may extend the deadline described by
122	122	Subsection (b) for a period not to exceed 30 days on written
123	123	agreement of the appraisers, policyholder, and insurer.
124	124	(d) On deciding on the amount of loss, the umpire shall
125	125	issue a written appraisal award that:
126	126	(1) states the amount of loss; and
127	127	(2) is signed by the umpire and at least one appraiser.
128	128	(e) The umpire may not alter any valuation or any portion of
129	129	the amount of loss on which the appraisers agree.
130	130	(f) An appraisal award issued under Subsection (d) does not
131	131	prevent either party from pursuing all other rights under the
132	132	policy or law.
133	133	Sec. 2009.055. APPRAISAL EXPENSES; TERMINATION OF
134	134	APPRAISAL PROCESS. (a) The policyholder and insurer shall equally
135	135	divide and pay the umpire's expenses, as applicable, and all other
136	136	appraisal expenses, except that each party shall pay their own
137	137	appraiser.
138	138	(b) If a party's appraiser materially fails to comply with
139	139	the deadlines under this chapter and the other party makes a good
140	140	faith effort to address the failure and continue the appraisal
141	141	process, the other party may terminate the appraisal process and
142	142	seek recovery of the party's reasonable hourly appraiser expenses
143	143	incurred in the appraisal process.
144	144	(c) If the umpire materially fails to comply with the
145	145	deadlines under this chapter after making a good faith effort to
146	146	address the failure and continue the appraisal process, the
147	147	policyholder, the insurer, or both may terminate the appraisal
148	148	process and seek recovery of their reasonable hourly appraiser
149	149	expenses from the umpire.
150	150	(d) If an appraisal process is terminated under Subsection
151	151	(b), the party employing the noncompliant appraiser may not invoke
152	152	the appraisal process for the dispute at issue. However, the other
153	153	party may invoke the appraisal process for the dispute at issue.
154	154	(e) If an appraisal process is terminated under Subsection
155	155	(c), the policyholder or the insurer may invoke the appraisal
156	156	process for the dispute at issue.
157	157	(f) The appraisers for the policyholder and the insurer and
158	158	the umpire must be paid on an hourly or flat-fee basis, using a
159	159	reasonable hourly rate and based on the estimated number of hours
160	160	reasonably necessary to complete the appraisal process. The
161	161	appraisers for the policyholder and insurer may not be paid on any
162	162	basis other than an hourly or flat-fee basis, including a
163	163	contingent or success basis.
164	164	Sec. 2009.056. EFFECT OF APPRAISAL. (a) The appraisal does
165	165	not affect any applicable policy terms.
166	166	(b) The amount of loss determined by the appraisal process
167	167	under this chapter is binding as to the policyholder and the
168	168	insurer. The use of the process is not a condition precedent to
169	169	bringing an action for a violation of this code, for a breach of
170	170	contract, or for any other common-law or statutory remedy.
171	171	Sec. 2009.057. EXTENSION OF DEADLINES. If the disputed
172	172	loss is the result of a weather-related catastrophe or major
173	173	natural disaster, as defined by the commissioner, the appraisal
174	174	deadlines imposed under Sections 2009.052 and 2009.053(a) and (b)
175	175	are extended for an additional 30 days.
176	176	SECTION 2. (a) Chapter 2009, Insurance Code, as added by
177	177	this Act, applies only to an insurance policy delivered, issued for
178	178	delivery, or renewed on or after January 1, 2026.
179	179	(b) An insurance policy form providing for an appraisal
180	180	process that is in use on September 1, 2025, and otherwise compliant
181	181	with Chapter 2009, Insurance Code, as added by this Act, is not
182	182	required to be filed with the Texas Department of Insurance as a
183	183	consequence of this Act.
184	184	SECTION 3. This Act takes effect September 1, 2025.