The 2027 Texas Appraisal Rules, Explained for Policyholders

The short version

• Every residential property and personal auto policy issued or renewed in Texas on or after March 1, 2027 must contain an appraisal provision that meets the new rules (28 TAC §5.9800). TWIA and commercial policies are excluded.
• Either side can demand appraisal unilaterally, and the policy may not require an "impasse" first (§5.9802).
• Firm deadlines: 20 days to name appraisers, 15 days to pick an umpire, 120 days for the appraisers to try to agree, 240 days for an umpire award (§5.9805).
• Minimum qualifications for appraisers and umpires, including a licensing or trade-experience requirement on dwelling losses (§5.9804).
• Insurers must send you a plain-language appraisal notice with every claim acceptance or rejection letter (§5.9803).
• The award is binding as to the amount of loss, with narrow exceptions for lack of authority, non-compliance with the clause, fraud, accident or material mistake (§5.9802(4)).

Background: why Texas changed the rules

Appraisal has existed in Texas property policies for over a century, but the clause was never mandatory, and in recent years several carriers removed or narrowed it. Policyholders with an underpaid claim were left with two options: accept the carrier's number or sue. SB 458 (89th Legislature, 2025) responded by adding Chapter 1813 to the Insurance Code and directing the commissioner to adopt rules that mandate appraisal and set the period in which it must be completed. TDI proposed those rules in May 2026 and adopted them, with changes, in the fall of 2026. The original September 1, 2026 compliance date moved to March 1, 2027 to give carriers time to refile policy forms.

What the appraisal clause must say (§5.9802)

Every covered policy must include an appraisal provision that:

1. gives either party the right to unilaterally demand appraisal;
2. does not require an impasse before a demand;
3. applies to disputes about the amount of loss, partial or total, other than a total loss by fire governed by Insurance Code §862.053(a);
4. makes the award binding as to the amount of loss, unless it was made without authority, not in substantial compliance with the clause, or tainted by fraud, accident or material mistake;
5. states the deadlines and process, including the specific time periods in §5.9805 (residential) or §5.9806 (auto); and
6. does not conflict with the division or other Texas law.

Carriers may add other terms as long as they do not limit or violate Chapter 1813 and the rules.

The residential timeline (§5.9805)

• DemandWritten appraisal demand

  Must be made in writing and delivered to the other party, generally no later than the policy's limitations period for filing suit. Special timing applies once a pre-suit notice under Chapter 542A is sent (the insurer then has 60 days) or a lawsuit is filed (the respondent must demand by the time its answer is due, and the plaintiff generally loses the right to demand).

• Within 20 daysEach party hires its appraiser

  And gives the other party the appraiser's name and contact information in writing.

• Within 15 days after thatAppraisers jointly choose an umpire

  The umpire may also be chosen within 15 days after the appraisers fail to agree on the amount of loss. If they cannot agree on an umpire, either party may ask a county or district court where the property sits to appoint one. A policy may also allow the policyholder (only) to use an independent umpire-selection vendor, or any method both parties agree to in writing. Ten days' written notice to the other side is required before requesting a court or vendor appointment.

• Within 120 days of the demandAppraisers attempt to agree

  The two appraisers must attempt to agree on the amount of loss in dispute.

• Within 240 days of the demandUmpire award

  If an umpire is involved, the award must issue within 240 days of the demand. If it does not, the umpire's engagement terminates automatically and the appraisers must choose a new umpire within 15 days.

Any of these deadlines can be modified by written agreement, but only after the insurer has sent the required appraisal notice (§5.9805(c)).

Who may serve as appraiser or umpire (§5.9804)

All appraisers and umpires must be (1) competent by training or experience to evaluate the type of loss, (2) independent from the parties and (3) disinterested in the outcome. On a residential loss involving a dwelling, they must also be one of the following:

• an adjuster or public adjuster with experience or training in estimating residential property losses;
• an engineer or architect with experience in residential construction, repair, damage investigation or estimating; or
• someone with occupational experience or training in constructing or repairing the damaged property type, or estimating that type of loss.

The notice you are now entitled to (§5.9803)

Each time an insurer accepts or rejects a claim under Insurance Code §542.056, it must also provide a plain-language appraisal notice in at least 10-point type. The notice must explain where the appraisal clause is in your policy, how to demand appraisal and what to include, your responsibilities (including hiring an appraiser and any share of appraisal expenses), how to request an umpire if the appraisers cannot agree, every applicable deadline, and the effect of an award.

If you receive a partial payment or a lowball estimate after March 1, 2027 without that notice, the carrier has missed a regulatory requirement. Keep the letter.

What the rules do not do

• They do not apply to commercial policies or to TWIA policies, which keep their own clauses and processes.
• They do not let an appraisal panel decide coverage. Appraisal is "solely to determine the amount of loss" (§5.9800(a)). A denial on coverage grounds is a different fight.
• They do not apply to policies issued or renewed before March 1, 2027. Until your policy renews after that date, the appraisal clause printed in your current policy controls, if there is one.
• They do not say who pays. Expect each party to pay its own appraiser and share the umpire's fee equally, as most clauses already provide; read yours.

What to do now

1. Read your current policy's appraisal clause. If your policy has one today, you can use it today.
2. Keep every claim letter. The §542.056 acceptance or rejection letter starts the appraisal notice obligation after March 1, 2027.
3. Do not wait for the deadline. Twenty days to name an appraiser goes quickly. Line one up when you first disagree with the carrier's estimate.
4. Verify qualifications. Ask for the appraiser's license number or professional credentials and confirm they have no stake in the outcome.

Source: Texas Department of Insurance, adopted 28 TAC §§5.9800-5.9806 (Division 4, Appraisal Requirements), implementing Insurance Code Chapter 1813 (SB 458, 89th Legislature). This page is a summary for policyholders, not legal advice. Check the current rule text and your own policy, and consult a Texas attorney about your situation.

Joseph DittmanAppraiser and licensed Texas public adjuster (Texas public adjuster license #3356839). Joseph serves as policyholder-appointed appraiser and as umpire on property losses across Texas. About