Texas is in the middle of rewriting the rules for one of the least understood parts of a home or auto claim: appraisal. Senate Bill 458 is already law, it already applies to policies issued or renewed on or after January 1, 2026, and the Texas Department of Insurance has a proposed rule that would put hard deadlines and a mandatory written notice behind it starting September 1, 2026. Here is what has actually changed, what has not changed yet, and what it means the next time you and your insurance company disagree about the amount of a claim.
What is insurance appraisal, and when does it apply?
Appraisal is a dispute-resolution process built into most home and auto policies. It settles one question only: how much the loss is worth. Each side hires its own appraiser, the two appraisers try to agree on the amount, and if they cannot, an umpire breaks the tie. The result is called an appraisal award.
What appraisal does not do is decide whether the damage is covered in the first place. The new statute says so explicitly. Texas Insurance Code §1813.003(b) describes the appraisal provision as “a type of dispute resolution process solely to determine the amount of loss when that amount is in dispute.” If your carrier says a roof was worn out rather than hail-damaged, that is a coverage fight, not an appraisal fight.
What does SB 458 actually require?
SB 458 passed the 89th Legislature in 2025 and became effective September 1, 2025. It created a new Chapter 1813 of the Texas Insurance Code, “Appraisal of Disputed Losses.” The short version:
- It applies to personal auto and residential property policies issued in Texas — including policies from county mutuals, Lloyd’s plans, farm mutuals, eligible surplus lines carriers, and the FAIR Plan.
- It does not apply to TWIA policies or to any commercial policy. That exclusion is written into §1813.001(b).
- It applies to policies delivered, issued, or renewed on or after January 1, 2026. If your homeowners policy renewed this spring, you are already in the new world.
- An appraisal award is binding on both you and the insurer, with narrow exceptions for fraud, accident, material mistake, or an award made without authority (§1813.004).
- The Commissioner is directed to adopt rules covering how long appraisal may take, appraiser and umpire qualifications, and when appraisal must be available (§1813.002).
That last piece is where the real mechanics live — and it is the part that is still in progress.
Has TDI finalized the new appraisal rules?
No. Not as of this writing. TDI filed the proposed rules — new 28 TAC §§5.9800–5.9806 — on April 23, 2026, and they published in the Texas Register on May 8, 2026. On TDI’s own rules table, the “Adoption Filed,” “Adoption Publishes,” and “Effective Date” columns are still blank.
This matters, because a lot of the commentary circulating right now describes these deadlines as if they were final. They are not. They are proposed, and TDI has proposed September 1, 2026 as the date carriers would have to have compliant policy forms and notices in place. Treat the details below as the shape of what is coming, not as settled law.
What deadlines does the proposed rule create?
For residential property claims, the proposed §5.9805 would build a clock into the process:
- One year from the insurer’s claim acceptance or rejection notice to make a written appraisal demand — shortened to 30 days if you are the respondent in a lawsuit.
- 20 days after the demand for each party to hire its own appraiser.
- 15 days for those two appraisers to jointly choose an umpire.
- If the appraisers deadlock on an umpire, either party could ask the county or district court where the property sits to appoint one.
The proposal also confirms that either party can demand appraisal unilaterally — you do not have to prove you reached an impasse first — and that appraisal is available for partial and total losses alike.
Would I get notified that appraisal is an option?
That is arguably the biggest consumer change. Proposed §5.9803 would require the insurer to hand you a plain-language appraisal process notice, in at least 10-point type, at the same time it sends the claim acceptance or rejection notice required by Insurance Code §542.056. The notice would have to explain how to demand appraisal, how to get an umpire appointed (including through a court), the time limits, and what the award does.
Today, most policyholders learn appraisal exists only if a contractor or public adjuster mentions it. Under the proposal, it arrives in the mail with the claim decision.
Who is allowed to serve as an appraiser?
Proposed §5.9804 would require appraisers and umpires to be competent, independent, and disinterested. For damage to a residential dwelling, it goes further: the appraiser would have to be an adjuster or public adjuster, an engineer or architect with residential construction experience, or someone with equivalent occupational experience.
How often does appraisal actually get used in Texas?
Rarely — and that is exactly why the notice requirement is significant. TDI ran a data call and published the results in its 2024 Appraisal Experience Data Call Report. The findings are worth sitting with:
- Appraisal was used in fewer than 2% of payable residential property claims, rising from 1.18% in 2021 to 2.30% in 2023.
- In personal auto, it was used in fewer than 2 out of every 10,000 payable claims.
- Policyholders, not carriers, started roughly 97–99% of residential appraisals.
- The average award was $33,949 on residential property and $29,541 on personal auto.
- Residential awards came in about $22,600 above the insurer’s initial offer on average; auto awards about $5,300 above. Roughly 97–98% of awards exceeded the initial offer.
Read that last line again. When Texas homeowners went to appraisal, they came out ahead of the carrier’s first number almost every single time. A tool that improves the outcome 97% of the time and gets used on 2% of claims is a tool people do not know they have.
What does appraisal cost and how long does it take?
An umpire was used in about 16% of completed residential appraisals and 7% of auto appraisals, and it roughly doubles the timeline. Over half of residential appraisals finished within three months of the demand and about 90% within eight months; with an umpire, the median stretched past 130 days. Insurers’ own average expense ran about $2,800 per residential appraisal and $570 per auto appraisal, climbing to roughly $4,100 and $890 when an umpire was involved — about 8% and 2% of the award, respectively. You bear the cost of your own appraiser.
Does appraisal replace a lawsuit?
Often, yes. In TDI’s data, lawsuits filed before a residential appraisal fell from 3.5% in 2021 to 0.4% in 2023, and lawsuits filed after appraisal fell from 10.9% to 0.9%. Appraisal is faster and dramatically cheaper than litigation, and it keeps the fight narrowly about the number.
What should Central Texas homeowners do about this now?
Three practical things.
Read your declarations page for the renewal date. If your policy renewed on or after January 1, 2026, Chapter 1813 governs it. If it renews later this year, ask your agent whether the carrier has filed an updated appraisal provision.
Keep the claim acceptance or rejection letter. Under the proposed rule, that letter starts the one-year appraisal clock and would carry the appraisal notice itself. It is the single most important piece of paper in a disputed claim.
Document the loss before repairs. Appraisal decides an amount, and an appraiser can only value what can be shown. Photographs, measurements, and a written contractor scope taken before anyone tears out drywall are what make an appraisal demand worth filing.
One more thing worth naming: this law does nothing for commercial property owners, and nothing for TWIA policyholders on the coast. If you own an apartment building, a hotel, or a church, your appraisal rights come from your policy language alone — which is a reason to actually read that clause instead of assuming it mirrors the personal lines rules.
If you want us to pull your homeowners or auto policy and tell you what your current appraisal provision says — including whether your carrier has updated it for Chapter 1813 — send it over or call the agency at 830-303-8300. It takes about ten minutes and it is a lot cheaper to know before a hailstorm than after one. You can also read more about how we approach home insurance in Texas.
