The Texas Department of Insurance has formally proposed new rules, 28 TAC §§5.9800 through 5.9806, that will govern how appraisal works in personal auto and residential property insurance claims. The proposal implements Senate Bill 458 from the 89th Texas Legislature (2025), which added Chapter 1813 to the Texas Insurance Code and made appraisal provisions mandatory in these policies. TDI signed the proposal on April 23, 2026, held a public hearing on June 2, and closed the written comment period on June 8. Under the current draft, the new requirements would apply to policies issued or renewed on or after September 1, 2026.
For anyone who handles first-party property or auto claims in Texas, this rulemaking changes the ground rules. Appraisal has long existed in Texas policies as a creature of contract, with terms that varied carrier to carrier and case law filling the gaps. Chapter 1813 and these rules replace much of that patchwork with a single statewide framework.
What SB 458 did
SB 458 took effect September 1, 2025, and applies prospectively to personal auto and residential property policies delivered, issued for delivery, or renewed in Texas on or after January 1, 2026. It requires covered policies to contain an appraisal provision, limits appraisal to determining the amount of loss rather than coverage questions, and makes the resulting award binding on both parties except in cases of fraud or material mistake. The law reaches a wide range of insurers, including stock and mutual companies, county mutuals, Lloyd's plans, reciprocal exchanges, farm mutuals, surplus lines insurers where Texas is the home state, and the FAIR Plan. It does not apply to commercial policies or to the Texas Windstorm Insurance Association, which has its own appraisal regime.
The statute left the operational details to TDI. The commissioner must adopt rules establishing the period in which an appraisal must be completed and addressing appraiser and umpire selection and qualifications.
How the rulemaking got here
TDI posted an informal working draft on September 22, 2025, and took comments through October 6, 2025. That draft drew significant criticism. Among other things, it gave appraisers 180 days just to attempt agreement before an umpire entered the picture, and stakeholders on both sides flagged problems with the umpire selection and qualification provisions.
Seven months later, TDI released the formal proposal, which tightened the timelines and reworked several mechanisms in response to the comments. Practitioners who tracked both drafts, including the insurer-side lawyers at Zelle LLP, have described the revised version as a marked improvement. The proposal was the subject of Docket No. 2862, with the hearing held June 2, 2026, at the Barbara Jordan State Office Building in Austin.
What the proposed rules say
Either side can invoke appraisal unilaterally. The proposal eliminates any mutual consent requirement. A policy provision conditioning appraisal on both parties' agreement would presumably be invalid. The proposal also drops any requirement that the parties reach a formal impasse first; a live dispute over the amount of loss is enough, even while negotiations continue. Insurers can still require a proof of loss consistent with Insurance Code Chapter 542, Subchapter B, so the claims-handling process itself doesn't disappear.
A 240-day clock for residential claims. Each party must hire an appraiser and exchange names and contact information in writing within 20 days of the demand. The two appraisers then have 120 days to try to agree on the amount of loss. If an umpire is needed, the award must issue no later than 240 days from the demand. The deadline has teeth: if day 240 passes without an award, the umpire's engagement automatically terminates and the appraisers must select a new umpire within 15 days. For genuinely complex losses, the parties can modify any deadline by written agreement after the appraisal process notice is provided.
Minimum qualifications for appraisers and umpires. Participants must be competent to evaluate the type of loss, independent of the parties, and disinterested in the outcome. For residential appraisals involving damage to a dwelling, the proposal adds credential requirements. The appraiser or umpire must be a licensed adjuster or public adjuster with residential estimating experience, an engineer or architect with experience in residential construction, repair, or damage investigation, or a person with occupational experience or training in the relevant type of construction, repair, or loss estimation. These are floors, not ceilings; policies can impose additional requirements that don't conflict with them.
No more surprise umpire appointments. A party seeking an umpire appointment must give the other side at least 10 days' written notice of its intent and must provide a copy of the actual request before or when it's submitted. The proposal also blesses vendor-based alternatives to judicial appointment, but only with guardrails: the insurer must list at least two vendors and let the policyholder choose between them, or structure the option so only the policyholder can invoke it. This piece drew organized opposition during the comment period from policyholder advocates who argue vendor-based selection lets insurers shape the umpire pool.
A one-year deadline to demand appraisal. For residential property claims, a party must demand appraisal in writing within one year of the insurer's acceptance or rejection of the claim. If litigation begins, the respondent gets a 30-day window from the filing of the lawsuit to demand appraisal even after the one-year period has run. Insurer-side commenters have suggested running that window from the answer date instead, since a plaintiff could otherwise file suit and delay service to burn the 30 days. This is a real shift from current practice, where appraisal can generally be invoked at almost any point absent waiver.
A companion disclosure rule is still open for comment
On May 1, 2026, TDI separately proposed amendments to 28 TAC §5.9970 and §5.9971 that would fold the right to request appraisal into the consumer Bills of Rights for auto and homeowners policies, with the revised notices distributed starting November 1, 2026. Written comments on that proposal are due by 5:00 p.m. Central on June 15, 2026. If you missed the June 8 deadline on the main appraisal rule, this is the remaining open channel to weigh in on the SB 458 rollout.
What to do now
Carriers should not wait for adoption. Under the current draft the rules would apply to policies issued or renewed on or after September 1, 2026, and amended policy forms must be filed with TDI for review and approval before then. That means drafting compliant appraisal provisions now, deciding whether to offer a vendor-based umpire option that satisfies the two-vendor or policyholder-only structure, and lining up panels of appraisers who meet the dwelling-loss credential requirements. Public adjusters, contractors, and policyholder counsel should start calendaring the one-year demand deadline on every accepted or rejected residential claim and vetting their preferred appraisers against the qualification categories. TDI is reviewing the comments it received, and the adopted rule could still change, so confirm final text against the adoption order before filing forms.
Sources
- SB 458 Bill Analysis, 89th Legislature (Senate Research Center, introduced version)
- SB 458 Bill Analysis (enrolled version)
- TDI Docket 2862, Appraisal Process Rule Hearing (proposed 28 TAC §§5.9800 to 5.9806)
- TDI Informal Working Draft, 28 TAC §§5.9800 to 5.9805 (September 22, 2025)
- TDI Request for Informal Comments cover memo (September 22, 2025)
- TDI Proposed Amendments to 28 TAC §5.9970 and §5.9971, Consumer Rights Notices (May 1, 2026)
- TDI Rules: Informal, Proposed, and Adopted
- LegiScan: Texas SB 458 (2025)
- Zelle LLP, "TDI's Revised Appraisal Rules: What Changed, Why It Matters, and How to Get Ready" (April 30, 2026)
- Insurance Journal, "TDI Drafts New Rule Requiring Appraisal Provision in Auto and Homeowners Policies" (October 16, 2025)
- CollisionWeek, "Texas Insurance Department Proposes Auto Appraisal Rule" (April 30, 2026)
- Autobody News, "Texas Auto Policyholders Set to Receive Right-to-Appraisal Notice at Every Renewal Under Proposed TDI Rule" (May 2026)
- Green, Klein, Wood & Jones, "Texas Appraisal Bill: TDI's Proposed Rules" (September 25, 2025)
- Auto Claim Specialists comment campaign on Docket 2862 (policyholder advocacy)