The Texas Department of Insurance (TDI) has adopted final Texas right to appraisal rules that set the appraisal process auto policyholders and their insurers use to resolve disputes over the amount of loss. The rules require covered personal auto policies to let either party request a court-appointed umpire when the appraisers cannot agree on one. They also allow only the policyholder to invoke a vendor-based umpire option.
For collision repairers, parts sourcing, ADAS calibration allowances, labor rates, and total loss valuations were identified as amount-of-loss disputes that can trigger appraisal in an October 2025 report on how one Texas shop prepared for the law.
Commissioner of Insurance Amanda Crawford adopted the rules in Commissioner’s Order No. 2026-10210. TDI’s rule-tracking page lists the order as filed Nov. 4, with an effective date of Nov. 24. The rules implement Senate Bill 458 and cover personal auto and residential property policies delivered, issued for delivery, or renewed in Texas on or after March 1, 2027.
SB 458 became law after years of advocacy by collision repairers, the Auto Body Association of Texas, Texas Watch, and public adjusters. It took effect Sept. 1, 2025, and mandates that qualifying personal auto and residential property policies contain an appraisal provision for disputes about the amount of loss.
Only policyholders can invoke the vendor option
The proposed rule offered insurers two ways to include a vendor umpire option. They could list at least two vendors and let the policyholder pick one, or they could allow only the policyholder to invoke the option.
In the final version, the insurer decides whether to offer a vendor option and which vendor to name, but only the policyholder may invoke it. TDI dropped the multiple-vendor alternative.
For auto policies, a request for a court-appointed umpire must go to a county or district court where the vehicle is principally garaged, as identified in the policy. When appraisers cannot agree on an umpire, the order says judicial appointment controls unless the policyholder invokes the vendor method or both sides agree in writing on another method after appraisal is demanded.
Auto Claim Specialists ran a public campaign through its TDI Advocates website asking for four changes. The site lists two as adopted: giving the insured the choice of umpire selection method at the time of a dispute, and preserving the option of court appointment. The campaign site thanked TDI “for hearing policyholders out and acting on what they said.”
Disclosure and cost requests rejected
The other two requests were not adopted.
The first would have required insurers to disclose in the policy any financial relationship with listed vendors. TDI said that request fell outside the scope of the rulemaking. In its response, the agency said a policyholder with concerns about a vendor “can simply decline to invoke the vendor option and instead request judicial appointment.”
The second would have required insurers to pay the full cost of a vendor-appointed umpire, and one commenter also sought a cap on umpire fees. TDI declined both. It noted that the parties usually split umpire costs evenly and that vendor appointment likely carries an extra service fee. TDI said limiting the vendor option to policyholders addresses the cost and fairness issues commenters raised, and it called a fee cap beyond the rulemaking’s scope.
Deadlines for auto claims
Under the final rule, a policyholder or insurer must make an appraisal demand in writing and deliver it to the other party before the policy’s limitations period for filing suit expires.
Once a lawsuit is filed, the plaintiff generally can no longer demand appraisal, and a respondent that wants appraisal must demand it by the date its answer is filed or due, whichever comes first. The proposal had set a 120-day window starting when the insurer notified the policyholder that the claim was accepted or rejected, covered in May.
Once appraisal is demanded on an auto claim:
Each party has 20 days to hire an appraiser.
- The policy must require the appraisers to choose an umpire within 15 days, measured from one of two points the insurer selects.
- The appraisers must try to agree on the amount of loss within 40 days of the demand.
- If an umpire is involved, the award must be issued within 180 days of the demand, or the umpire’s engagement ends and a replacement must be chosen within 15 days.
- The parties may change any of these deadlines by written agreement after the insurer sends the appraisal process notice.
Insurers must send that notice when they accept or reject a claim. The notice must be in plain language and at least 10-point type. It must explain how to demand appraisal, the policyholder’s duties (including hiring an appraiser and any share of expenses), how to request an umpire through the courts, the key deadlines, and the effect of the award.
The notice is separate from an update to the auto Consumer Bill of Rights, which TDI finalized in September and which tells policyholders that they or their insurer can demand appraisal. That update takes effect Jan. 1, 2027. In that order, TDI said appraisal deadlines belonged in a separate rulemaking under Insurance Code Chapter 1813.
Lisa McArdle