Texas releases proposed rulemaking on right-to-appraisal law
The Texas Department of Insurance (TDI) has released its proposed requirements for a right to appraisal (RTA) bill passed into legislation last year.
SB 458 (98R, 2025) requires property insurance policies in Texas to include an appraisal provision.The bill also directed the TDI to adopt rules for the new law.
Robert McDorman, Auto Claims Specialists general manager who advocated for the RTA bill, said that TDI’s proposed requirements are an “absolute victory for the insured citizens of Texas.”
The rules require an insurer to provide an appraisal process notice to the policyholder at the same time the insurer provides the notice of acceptance or rejection of the claim. It notes that TDI’s 2024 Appraisal Experience Data Call Report indicated that demand for appraisals was small, indicating that policyholders are unlikely familiar with how the appraisal works and might not be aware of the availability.
A notice should include where the appraisal provision is located in the policy contract, how the policyholder may demand an appraisal, including where to send the demand and what information the demand should include. It also should include the policyholder’s responsibilities, how the policyholder may request the appointment of an umpire, applicable time limits and the effect of the appraisal award.
McDorman notes that the rules directly state that either party has the right to unilaterally demand an appraisal. Previously some policies in the state required both parties to consent to appraisals.
The rules say that requiring both parties to consent would frustrate the purpose of the bill.
Criteria for appraisers and umpires are also outlined, including that they have competency to evaluate the type of loss, are independent from the parties and have a disinterest in the appraisal’s outcome.
A hearing where TDI will collect public comments is set for 10 a.m. to noon on June 2. It will be held in the Barbara Jordan State Office Building, Room 2.035, 1601 Congress Avenue, Austin.
Those wishing to attend virtually may join by Zoom here. A public participation form can be submitted to speak virtually during the meeting. You can find the form here.
Written comments can also be sent to TDI by 5 p.m. June 8. They can be emailed to [email protected] or mailed to the Office of the Chief Clerk, MC: GC-CCO, Texas Department of Insurance, P.O. Box 12030, Austin, Texas 78711.
The Washington Office of the Insurance Commissioner (OIC) released a pre-publication draft of its requirements for appraisal umpires to register on its site in September following the passage of an RTA bill in the state.
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