What Are the Next Steps Toward Mandatory Appraisal Rights? 

by Robert L. McDorman

Dear Mr. McDorman,

I own and operate a collision facility in West Texas. I read last month’s editorial about Mr. Collins, a Texas Hero. Like you, I also hope Mr. Collins will come to the Capitol this next legislative session to tell his story. I am certain it will have the same impact on lawmakers as it did on the jury in East Texas. It says something special about a man who will stand up and fight for others to prevent them from being harmed like he was. About the State Farm verdict, I have seen a small but noticeable change since this trial in the way some carriers are handling claims once I point them to the verdict. What do you think the next step should be in the battle to secure mandatory appraisal rights in Texas motor vehicle policies?

Thank you for your questions. Yes, Mr. Collins is a special man, a man who humbly puts others ahead of himself. I had the opportunity to meet with Mr. Collins and his attorney last week. At the beginning of our meeting, he again told me, “You know Robert, I am not a wealthy man, but this small amount of money that State Farm cheated me out of will not break me; however, for many people in our community, it would be devastating.” He went on to ask me if I would accept the proceeds the jury awarded him and use it to help secure mandatory appraisal rights for all insured Texans. Once again, he said, “I want to make a difference and possibly make a change in the current claim handling process, so maybe one day, this will not happen to the single mom working two jobs and living paycheck to paycheck.” Of course, he didn’t have to ask me twice. I immediately told him I would.

Mr. Collins asked me how I planned to use the State Farm settlement proceeds to further advance our position for mandatory appraisal rights in Texas. I explained to him that, with his permission, in my professional opinion, we should use it to educate the Texas Department of Insurance (TDI) and lawmakers to further advance the mandatory Right to Appraisal message and show it as a safety issue for us all. Now that the State Farm verdict is final and set in concrete as a precedent to point to, I believe it will be a little easier to get folks to understand and become interested in helping. I further explained to him that we should call on the TDI to closely look at any motor vehicle policy changes regarding the Appraisal Clause until the end of the next legislative session. It is my position that any limiting or removal of the Right to Appraisal concerning a repair procedure dispute will be the nail in the coffin for safe roadways for us all. 

As I have said many times, appraisal is the guardrail for indemnification of the loss when a dispute over the loss arises between the insurer and the insured. Without legislation requiring mandatory time-sensitive appraisal rights, we can expect to see continued efforts by all insurers to limit or remove economic relief for the insured. When it comes to dogged institutionalized practices for under-indemnification of a covered loss, the insurance carrier can best be seen as a mama bear protecting her cubs and will fight anyone trying to take them away. Mandatory Right to Appraisal would stop this atrocity.

Over the years, as stark consumer advocates, Auto Claim Specialists have gone to agencies to seek help and relief with well-documented facts for our clients who have been harmed by their insurance carrier and to bring awareness to these systematic atrocities. At each turn, we were told the only help was to seek legislation or a finder of fact. I believe now that the State Farm verdict is a matter of law, lawmakers will take note and see this as time for change. 

Until legislators pass laws to make the Right to Appraisal mandatory in Texas for all motor vehicle policies, we have no choice but to continue to advise our clients who have been harmed and cheated by their insurance carriers to fight like the third monkey in line to get onto Noah’s Ark when it has already begun to rain, and we will help. I firmly believe that the more times these systematic under-indemnification schemes are exposed – and monetary punishment is levied – the quicker change will come about to help us all. Thank you, Mr. Collins, for believing in me to be a good steward of your State Farm settlement proceeds to help ensure that the mandatory Right to Appraisal in Texas motor vehicle insurance policies becomes law.

The under-indemnification in total loss and repair procedure claims in Texas is rampant. Besides the higher settlements for total loss clients averaging 28 percent above the carrier’s undisputed loss statement, we have also reduced clients’ out-of-pocket expenses on repair procedure disputes such as the above example. These under-indemnification percentages are staggering and harmful to Texas citizens.

The spirit of the Appraisal Clause is to resolve loss disputes fairly and to do so in a timely and cost-effective manner. The invocation of the Appraisal Clause removes inexperienced and biased carrier appraisers and claims handlers from the process, undermining their management’s many tricks to undervalue the loss settlement and under-indemnify the insured. Through the Appraisal Clause, loss disputes can be resolved relatively quickly, economically, equitably and amicably by unbiased experienced independent third party appraisers as opposed to more costly and time-consuming methods such as mediation, arbitration and litigation. 

In today’s world regarding motor vehicle insurance policies, frequent changes in claim management, claim handling policies and non-standardized GAP Addendums, we have found it is always in the best interest of the insured or claimant to have their proposed insurance settlement reviewed by an expert before accepting. There is never an upfront fee for Auto Claim Specialists to review a motor vehicle claim or proposed settlement and give their professional opinion as to the fairness of the offer.

Please call me should you have any questions relating to the policy or covered loss. We have most insurance policies in our library. Always keep in mind a safe repair is a quality repair and quality equates to value. I thank you for your question and look forward to any follow-up questions that may arise.


Robert L. McDorman

Want more? Check out the January 2024 issue of Texas Automotive!