Friday, 28 May 2021 15:35

Texas House of Representatives Votes in Favor of Appraisal Clause Requirement

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On May 13, the Texas House of Representatives passed HB 2534 by a vote of 91-50, which, if signed into law, will require insurers to include appraisal clauses on all automotive policies, as well as an untraditional stipulation that the loser refunds the winner’s appraiser’s fees and expenses.

All other appraisal expenses, including umpire fees, are split evenly between the two parties.


Rep. Travis Clardy (R-Nacogdoches) sponsored the bill.


“House Bill 2534 has to do with the Right of Appraisal," Clardy explained before the vote, according to a post shared by the Auto Body Association of Texas (ABAT) on its Facebook page. "This is a longstanding tradition in the Insurance Code, but this will make it mandatory and allow everybody---both the insurance companies and the consumers---to elect the appraisal to make sure they get fair value with their vehicles.”


HB 2534 was approved without amendment by the House Insurance Committee in a 5-4 vote on April 27, and companion Senate Bill 1706 has been introduced by Sen. César Blanco (D–El Paso).


If approved by the Texas Senate, HB 2534 will take effect Sept. 1, but the change in law applies only to an insurance policy that is delivered, issued for delivery or renewed on or after Jan. 1, 2022.


If signed into law, HB 2534 would require insurance companies issuing auto policies in Texas to include a rather common version of the right to appraisal, with one major exception. After a claim is filed, the insured or insurer has 90 days to invoke the right to appraisal in the event they disagree on the amount of the loss.


Within 15 days of that demand, “Each party shall appoint a competent appraiser and… The appraisers appointed by the parties shall determine the amount of the loss.”


If the appraisers cannot determine an agreed-upon amount, they will...

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