Initiating Appraisal
The appraisal process in Texas begins when either the homeowner or insurer invokes the appraisal clause found in most homeowners insurance policies. This typically occurs when parties disagree about the claim amount despite attempts to negotiate. Either party can trigger this process by sending a written appraisal demand. Texas courts have affirmed that both insurers and policyholders have equal rights to demand appraisal. Once invoked, the appraisal process becomes binding on both parties, and Texas law sets strict timelines for compliance. The demand should clearly identify the disputed items and damage areas to establish the scope of the appraisal.
Appraiser Selection
Once the appraisal is triggered, each party selects its own independent appraiser, typically within 20 days, as specified in most Texas policies. Texas requires appraisers to be competent and impartial, though they need not be completely disinterested in the outcome. Public adjusters who previously worked on the claim cannot serve as appraisers under Texas law. Insurance companies cannot name the staff adjusters who handled the claim. Both selected appraisers must then jointly choose a neutral umpire before beginning their evaluation. If the appraisers cannot agree on an umpire, either party can petition a Texas district court to appoint one.
Damage Evaluation
The appointed appraisers independently investigate and evaluate the disputed damage. In Texas, appraisers determine the amount of loss but not coverage questions, which remain the insurer's decision. Appraisers inspect the property, review documentation, and may consult contractors or specialists. They develop itemized estimates reflecting repair or replacement costs according to policy terms. If the appraisers reach an agreement on damage values, that amount becomes binding. If they disagree, the umpire reviews their findings and makes final determinations on disputed items.
Award Finalization
The final appraisal award requires agreement from either both appraisers or one appraiser plus the umpire. Texas courts have established that the appraisal award addresses only the damage amount, not liability or coverage. Once finalized, the award becomes binding on both parties. The insurer must promptly pay the appraised amount for covered damages, typically within five business days under Texas prompt payment laws. The policyholder remains responsible for their deductible, which is subtracted from the final payment.
Post-Appraisal Challenges
Texas law allows limited grounds for challenging appraisal awards. Courts may vacate awards involving fraud, accident, mistake, or appraiser misconduct. However, mere disagreement with the valuation is insufficient grounds for overturning an award. Texas courts generally uphold appraisal decisions absent clear evidence of impropriety. The appraisal process does not prevent policyholders from pursuing bad faith claims if the insurer improperly handled the claim before the appraisal.