SB 458, the “Texas Appraisal Bill,” became law on June 20, 2025, and takes effect January 1, 2026. The bill directs the Texas Commissioner of Insurance to adopt rules regarding the timing of appraisals and the qualifications of appraisers under the statute.
On September 22, 2025, the Texas Department of Insurance (TDI) released a draft of the proposed rules and opened the public comment period. Comments are due by October 6, 2025, and can be submitted through TDI’s website: TDI Proposed Rules – SB 458.
Key Issues in the Proposed Appraisal Rules
1. Timing for Invoking Appraisal (§ 5.9803(a))
The draft rules state:
“A demand for appraisal under a residential property insurance policy must be made in writing not later than one year from the date the insurer gives the policyholder notice accepting coverage of the property loss or damage that is subject of the appraisal.”
This represents a major departure from current Texas law. Right now, appraisal can generally be invoked at almost any point, even during litigation, unless waived. Courts are hesitant to find waiver, so appraisals often occur late in the adjustment process.
The proposed one-year limit creates real challenges for complex claims—such as fire, water, or catastrophic storm losses—that can take more than a year to adjust in good faith. This could force insureds and insurers to invoke appraisal prematurely, complicating claim resolution.
Furthermore, the one-year provision begins on the date the insurer “accepts coverage” but is silent about claims where coverage (for whatever reason) might be denied. Depending on the reason for the denial, appraisal may still be permissible under the current law, however if appraisal must be demanded one year from when coverage is accepted, does this mean there is no time limit for appraisal for claims where coverage is not accepted, or does it mean appraisal is no longer available for those claims?
2. Umpire Replacement Ambiguities (§ 5.9803(b)(5))
The rules state that:
“If an umpire is engaged, the appraisal award must be issued not later than 180 days after the umpire is selected or appointed. If an appraisal award is not issued by the deadline, the appraisers may select a new umpire.”
This language raises significant questions:
- What does “issued” mean—submitted for review or signed by all?
- If appraisers cannot agree on an umpire, courts may appoint one (§ 5.9803(b)(4)), but does § 5.9803(b)(5) close that door for future replacements?
- On Day 181, is the umpire automatically removed, or must appraisers agree to remove them?
- If one appraiser selects a new umpire while another signs an award with the tardy umpire, is that award valid?
These ambiguities could create conflicting results and litigation if not clarified.
3. Excessive Timelines
Appraisal is meant to be faster and less costly than litigation. But under the draft rules, the process could stretch over a year or more:
- Within 30 days – parties must name appraisers
- Within 180 days – appraisers must attempt agreement on loss amount
- Within 210 days – an umpire must be selected
- Umpire then has 180 days to issue award
In practice, this means a standard residential appraisal could last 390 days or longer. Worse, the rules allow an “infinite umpire loop”—appraisers can replace an umpire every 180 days without limit. This undermines the entire purpose of appraisal as a quicker dispute resolution tool.
4. Qualifications of Appraisers and Umpires
The draft limits appraisers/umpires to three categories:
- Licensed engineers or architects
- Adjusters or public adjusters
- “General contractors”
This raises concerns because Texas does not license contractors, nor is there an official certification for “general contractor.” The definition is vague:
- Does a roofer qualify?
- Does a homebuilder?
- Would a homeowner who supervised a renovation be considered a “general contractor”?
This lack of clarity risks excluding qualified professionals while opening the door to unqualified participants.
Why These Rules Matter
The Texas appraisal process is central to resolving disputed property insurance claims efficiently. The proposed rules under SB 458 could:
- Limit policyholder rights by shortening appraisal timelines
- Create legal uncertainty with unclear umpire provisions
- Delay resolutions through excessively long deadlines
- Restrict qualified professionals from serving as appraisers or umpires
Stakeholders—including insurers, policyholders, contractors, and attorneys—must engage in this process to ensure the rules are fair, reasonable, and practical.
Public Comment Deadline: October 6, 2025
The public comment period is open until October 6, 2025.
📌 Submit comments here: TDI – Proposed Rules for SB 458
This is a critical opportunity to ensure that the final rules align with the realities of Texas insurance appraisals.
Conclusion
SB 458 was intended to provide structure to the Texas appraisal process, but the proposed rules raise serious concerns. Unless clarified and revised, they risk creating more disputes—not fewer.
Stakeholders are encouraged to review the draft rules and submit comments before October 6, 2025 to help shape a fair and workable appraisal framework for Texas.
