By: Schwertner, Blanco S.B. No. 458
Hughes
A BILL TO BE ENTITLED
AN ACT
relating to an appraisal process for disputed losses under personal
automobile or residential property insurance policies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 10, Insurance Code, is amended
by adding Chapter 1813 to read as follows:
CHAPTER 1813. APPRAISAL OF DISPUTED LOSSES
Sec. 1813.001. APPLICABILITY OF CHAPTER. (a) This chapter
applies only to a personal automobile or residential property
insurance policy delivered, issued for delivery, or renewed in this
state by an insurer, including:
(1) a capital stock insurance company;
(2) a mutual insurance company;
(3) a county mutual insurance company;
(4) a Lloyd's plan;
(5) a reciprocal or interinsurance exchange;
(6) a farm mutual insurance company;
(7) an eligible surplus lines insurer if this state is
the insured's home state as defined by Section 981.002; and
(8) the FAIR Plan Association.
(b) This chapter does not apply to:
(1) an insurance policy delivered, issued for
delivery, or renewed by the Texas Windstorm Insurance Association;
or
(2) a commercial insurance policy.
Sec. 1813.002. RULES. (a) The commissioner shall adopt
rules necessary to implement this chapter, including:
(1) rules establishing the period in which an
appraisal under a provision required by this chapter must be
completed; and
(2) rules mandating an appraisal for total loss and
damage of the property that is the subject of the appraisal.
(b) In adopting rules establishing the period described by
Subsection (a)(1), the commissioner must consider the
qualifications and selection of appraisers and umpires for the
appraisal.
Sec. 1813.003. REQUIRED POLICY PROVISION: APPRAISAL
PROCESS. (a) An insurance policy described by Section 1813.001(a)
must contain an appraisal provision that complies with this
chapter.
(b) The appraisal provision required by this chapter is
intended to provide a type of dispute resolution process solely to
determine the amount of loss when that amount is in dispute between
the policyholder and the insurer.
Sec. 1813.004. EFFECT OF APPRAISAL. (a) An appraisal under
the provision required by this chapter does not affect any
applicable policy terms, and an appraisal award must be made in
substantial compliance with the insurance policy.
(b) Except for fraud, accident, or material mistake
relevant to the appraisal or an appraisal award made without
authority, the amount of loss determined by an appraisal under this
chapter is binding as to the policyholder and the insurer.
SECTION 2. (a) Chapter 1813, Insurance Code, as added by
this Act, applies only to an insurance policy delivered, issued for
delivery, or renewed on or after January 1, 2026.
(b) An insurance policy form required to be filed under
Chapter 2301, Insurance Code, providing for an appraisal process
that is in use on September 1, 2025, and otherwise compliant with
Chapter 1813, Insurance Code, as added by this Act, is not required
to be filed with the Texas Department of Insurance as a consequence
of this Act.
SECTION 3. This Act takes effect September 1, 2025.