bill adds an appraisal process to auto insurance policies

The text as introduced · 527 words

89R2032 CJD-D

By: Schwertner
S.B. No. 369

A BILL TO BE ENTITLED

AN ACT

relating to an appraisal procedure for disputed losses under

personal automobile insurance policies.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 1952, Insurance Code, is amended by

adding Subchapter I to read as follows:

SUBCHAPTER I. APPRAISAL PROCEDURES

Sec. 1952.401. APPLICABILITY OF SUBCHAPTER. This

subchapter applies to an insurer writing personal automobile

insurance in this state, including an insurance company,

corporation, reciprocal or interinsurance exchange, mutual

insurance company, capital stock company, association, county

mutual insurance company, Lloyd's plan, and any other insurer.

Sec. 1952.402. REQUIRED POLICY PROVISION: APPRAISAL

PROCEDURE. A personal automobile insurance policy must contain an

appraisal procedure that complies with this subchapter.

Sec. 1952.403. APPRAISAL DEMAND; APPOINTMENT OF

APPRAISERS. (a) An insurer or the named insured may demand an

appraisal not later than the 90th day after the insurer accepts

liability and issues the insurer's undisputed liability offer.

(b) Each party shall appoint an unbiased appraiser and

notify the other party of that appraiser's identity not later than

the 15th day after the date an appraisal is demanded.

Sec. 1952.404. DETERMINATION OF LOSS. (a) The appraisers

appointed by the parties shall determine the amount of loss.

(b) If the appraisers fail to agree on the amount of loss

after the 30th day after the date all appraisers are appointed, the

appraisers shall select an unbiased umpire. The appraisers and

umpire shall determine the amount of loss not later than the 30th

day after the date the umpire is selected.

(c) The determination of the amount of loss agreed to by

both appraisers or by one appraiser and the umpire is binding on

both parties.

Sec. 1952.405. COURT SELECTION OF UMPIRE. If the two

appraisers are unable to agree on an umpire on or before the 15th

day after the date the appraisers determine an umpire is needed, the

insurer or the named insured may request that a court in the county

in which the named insured resides select the umpire.

Sec. 1952.406. APPRAISAL FEES AND EXPENSES. (a) Each party

is responsible for its own appraiser's fees and expenses.

(b) If at the end of the appraisal process the amount of loss

is determined to be more than 10 percent greater than the amount of

the insurer's last offer, the insurer shall refund the named

insured's reasonable out-of-pocket expenses for the insured's

appraiser's fees and expenses.

(c) If at the end of the appraisal process the appraisal

award is more than 10 percent less than the amount the insurer last

offered, the named insured shall pay the insurer's appraiser's

reasonable fees and expenses.

(d) All other appraisal expenses, including umpire

expenses, are shared evenly between the parties.

Sec. 1952.407. NO RIGHTS WAIVED. An insurer and a named

insured do not waive any rights under the policy that is the subject

of the appraisal by demanding an appraisal.

SECTION 2. The change in law made by this Act applies only

to an insurance policy that is delivered, issued for delivery, or

renewed on or after January 1, 2026.

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