| 5 | 9 | | |
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| 6 | 10 | | |
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| 7 | 11 | | A BILL TO BE ENTITLED |
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| 8 | 12 | | AN ACT |
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| 9 | 13 | | relating to an appraisal process for disputed losses under personal |
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| 10 | 14 | | automobile or residential property insurance policies. |
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| 11 | 15 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 16 | | SECTION 1. Subtitle A, Title 10, Insurance Code, is amended |
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| 13 | 17 | | by adding Chapter 1813 to read as follows: |
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| 14 | 18 | | CHAPTER 1813. APPRAISAL OF DISPUTED LOSSES |
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| 15 | 19 | | Sec. 1813.001. APPLICABILITY OF CHAPTER. (a) This chapter |
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| 16 | 20 | | applies only to a personal automobile or residential property |
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| 17 | 21 | | insurance policy delivered, issued for delivery, or renewed in this |
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| 18 | 22 | | state by an insurer, including: |
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| 19 | 23 | | (1) a capital stock insurance company; |
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| 20 | 24 | | (2) a mutual insurance company; |
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| 21 | 25 | | (3) a county mutual insurance company; |
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| 22 | 26 | | (4) a Lloyd's plan; |
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| 23 | 27 | | (5) a reciprocal or interinsurance exchange; |
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| 24 | 28 | | (6) a farm mutual insurance company; |
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| 25 | 29 | | (7) an eligible surplus lines insurer if this state is |
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| 26 | 30 | | the insured's home state as defined by Section 981.002; and |
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| 27 | 31 | | (8) the FAIR Plan Association. |
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| 28 | 32 | | (b) This chapter does not apply to: |
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| 29 | 33 | | (1) an insurance policy delivered, issued for |
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| 30 | 34 | | delivery, or renewed by the Texas Windstorm Insurance Association; |
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| 31 | 35 | | or |
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| 32 | 36 | | (2) a commercial insurance policy. |
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| 33 | 37 | | Sec. 1813.002. RULES. (a) The commissioner shall adopt |
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| 34 | 38 | | rules necessary to implement this chapter, including: |
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| 35 | 39 | | (1) rules establishing the period in which an |
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| 36 | 40 | | appraisal under a provision required by this chapter must be |
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| 37 | 41 | | completed; and |
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| 38 | 42 | | (2) rules mandating an appraisal for total loss and |
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| 39 | 43 | | damage of the property that is the subject of the appraisal. |
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| 40 | 44 | | (b) In adopting rules establishing the period described by |
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| 41 | 45 | | Subsection (a)(1), the commissioner must consider the |
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| 42 | 46 | | qualifications and selection of appraisers and umpires for the |
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| 43 | 47 | | appraisal. |
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| 44 | 48 | | Sec. 1813.003. REQUIRED POLICY PROVISION: APPRAISAL |
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| 45 | 49 | | PROCESS. (a) An insurance policy described by Section 1813.001(a) |
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| 46 | 50 | | must contain an appraisal provision that complies with this |
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| 47 | 51 | | chapter. |
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| 48 | 52 | | (b) The appraisal provision required by this chapter is |
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| 49 | 53 | | intended to provide a type of dispute resolution process solely to |
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| 50 | 54 | | determine the amount of loss when that amount is in dispute between |
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| 51 | 55 | | the policyholder and the insurer. |
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| 52 | 56 | | Sec. 1813.004. EFFECT OF APPRAISAL. (a) An appraisal under |
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| 53 | 57 | | the provision required by this chapter does not affect any |
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| 54 | 58 | | applicable policy terms, and an appraisal award must be made in |
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| 55 | 59 | | substantial compliance with the insurance policy. |
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| 56 | 60 | | (b) Except for fraud, accident, or material mistake |
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| 57 | 61 | | relevant to the appraisal or an appraisal award made without |
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| 58 | 62 | | authority, the amount of loss determined by an appraisal under this |
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| 59 | 63 | | chapter is binding as to the policyholder and the insurer. |
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| 60 | 64 | | SECTION 2. (a) Chapter 1813, Insurance Code, as added by |
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| 61 | 65 | | this Act, applies only to an insurance policy delivered, issued for |
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| 62 | 66 | | delivery, or renewed on or after January 1, 2026. |
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| 63 | 67 | | (b) An insurance policy form required to be filed under |
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| 64 | 68 | | Chapter 2301, Insurance Code, providing for an appraisal process |
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| 65 | 69 | | that is in use on September 1, 2025, and otherwise compliant with |
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| 66 | 70 | | Chapter 1813, Insurance Code, as added by this Act, is not required |
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| 67 | 71 | | to be filed with the Texas Department of Insurance as a consequence |
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| 68 | 72 | | of this Act. |
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| 69 | 73 | | SECTION 3. This Act takes effect September 1, 2025. |
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