Dean’s bill adding appraisal clauses to auto and home policies

The text as introduced · 409 words

89R5448 DNC-D

By: Dean
H.B. No. 4570

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. The commissioner shall adopt rules

necessary to implement this chapter, including rules establishing

the period in which an appraisal under a provision required by this

chapter must be completed. In adopting the rules establishing that

period, the commissioner shall:

(1) allow flexibility for an adequate investigation of

the claim that is the subject of the appraisal; and

(2) consider the time necessary to preserve the

independence of the appraisers.

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.

(b) Except for fraud or material mistake relevant to the

appraisal, the amount of loss determined by an appraisal under this

chapter is binding as to the policyholder and the insurer.

SECTION 2. 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.

SECTION 3. This Act takes effect September 1, 2025.