Starting January 1, 2026, Texas insurers must resolve personal auto and home loss disputes through a binding appraisal process, with no exceptions.
S.B. 458, passed unanimously by the legislature, rewrites the playbook for how carriers and policyholders resolve fights over the amount of a loss. If there’s a dispute, insurers can’t duck or delay; an appraisal must happen, and its result is final unless fraud or a major mistake is involved.
The new law applies to all personal auto and residential property policies issued or renewed in Texas after that date. It covers nearly all insurer types, from capital stock and mutual companies to surplus lines and the FAIR Plan, but excludes commercial policies and TWIA. Every eligible policy must contain a compliant appraisal clause, and the process must be used when the amount of damage is contested.
Here’s how it works: the policyholder and insurer each select an appraiser. If they don’t agree on the loss amount, those appraisers pick a neutral umpire. Once any two of the three agree on a number, that number becomes binding.
Additionally, the Texas Department of Insurance will soon set clear rules about how long appraisals can take, who can serve as appraisers and umpires, and when appraisals are mandatory, especially for total losses.
The law changes how insurers handle disputed claims, particularly in a state where storms, hail, and car accidents often generate disagreement over repair costs.
Though the law applies to 2026 policies, carriers will need time to review, revise, and file any necessary form changes, as well as train staff for the procedural and legal shifts ahead.
