INSURANCE APPRAISAL IN TEXASHow it works, and when it helps.
If you and your insurer agree the damage is covered but can't agree on what it costs to fix, the appraisal clause in your policy may settle it without a lawsuit. It can also end parts of your case you didn't mean to give up. Here's what to know before you invoke it.
- Appraisal decides the amount of the loss. It doesn't decide whether your policy covers it.
- Either side can usually demand it in writing. Each picks an appraiser, and the two appraisers pick an umpire.
- An award signed by any two of the three is generally binding on the amount.
- Paying an award can end your contract claim and many bad-faith claims, so get advice before you start.
WHAT APPRAISAL IS
Most Texas homeowners policies include an appraisal clause. It's a private, faster way to resolve a disagreement over how much a covered loss is worth: the scope of repairs, the price of materials and labor, or the value of damaged property.
Appraisal is not a trial. There's usually no judge, no testimony and no discovery. Texas courts allow appraisers to separate damage caused by a covered event from damage caused by something else, like wear or an earlier storm. Questions about coverage and the insurer's conduct stay with the courts.
WHEN IT'S A GOOD FIT, AND WHEN IT ISN'T
- The insurer paid something but far less than your contractor's estimate
- You disagree on repair versus replacement, like a partial roof versus a full roof
- The insurer's estimate leaves out line items or uses low pricing
- The whole claim was denied on a coverage ground or an exclusion
- The insurer has delayed for months or mishandled the claim
- Your main dispute is about what the policy means
HOW THE PROCESS WORKS
Typical steps under a Texas homeowners policy. Read your own appraisal clause for its exact deadlines.
- 01Written demandOne side sends a written demand for appraisal. Many policies require that the parties first disagree on the amount of loss.
- 02Each side names an appraiserUsually within 20 days. Appraisers must be competent and independent.
- 03The appraisers choose an umpireIf they can't agree within the policy's time, often 15 days, either side can ask a court to appoint one.
- 04Inspection and estimatesEach appraiser inspects the property and prices the loss. Where they disagree, they submit their differences to the umpire.
- 05The awardA written award signed by any two of the three sets the amount of loss. The insurer then applies your deductible, prior payments and any depreciation.
CHOOSING YOUR APPRAISER
Your appraiser is the most important decision in the process. Look for someone with real experience pricing your kind of loss, such as roofing, water mitigation or foundation work, who will hold up if the insurer challenges their independence.
- Avoid the contractor who will do the repairs, and anyone with a financial stake in the outcome.
- Get the fee terms in writing. Each side normally pays its own appraiser and splits the umpire's fee.
- Ask how many appraisals they've handled, and how many went to an umpire.
Insurers often welcome appraisal after a lawsuit is filed, because paying the award can end most of the case. Choosing when to invoke it is a strategic decision, not a formality.
WHAT HAPPENS AFTER THE AWARD
The Texas Supreme Court has held that when an insurer timely pays an appraisal award, that payment generally ends the homeowner's breach-of-contract claim and bad-faith claims that seek only policy benefits. Claims for an independent injury are an exception.
Paying the award does not automatically end a claim under the Texas Prompt Payment Act. If the insurer paid late, interest and attorney's fees may still be owed. Learn more in your rights under Texas insurance law.
APPRAISAL VS. A LAWSUIT
| Appraisal | Lawsuit | |
|---|---|---|
| Decides | Amount of loss only | Coverage, amount, and the insurer's conduct |
| Typical time | A few months | One to two years or more |
| Cost | Your appraiser plus half the umpire | Often contingency-fee; experts and court costs |
| Extra damages | None in the award itself | Possible statutory interest, fees and penalties |
FREQUENTLY ASKED QUESTIONS
Can my insurer force me into appraisal?
If your policy has an appraisal clause, either side can usually invoke it, even after a lawsuit is filed. Texas courts enforce these clauses and rarely find that a party waived its right to appraisal.
Is the appraisal award binding?
Generally yes, as to the amount of loss. Courts set aside awards only in narrow situations, such as fraud, an award made without authority, or one that doesn't reflect the parties' agreement.
Does appraisal decide whether my claim is covered?
No. An insurer can still deny coverage after an award. That's why the order in which you raise appraisal and coverage disputes matters.
Do I need a lawyer for appraisal?
Not always. But a short consultation before you invoke appraisal can protect claims you'd otherwise give up, and help you pick an appraiser who will hold up.