Mandatory Right to Appraisal Rules to be Published This Month

By the time this publication reaches the hands of readers, the rules intended to govern the implementation of the mandatory Right to Appraisal which insurance companies will have to comply with should be posted by the Texas Department of Insurance (TDI).

This final step comes more than a year after Texas took a historic step toward protecting insurance consumers by making the Right to Appraisal mandatory in all personal auto insurance policies. However, according to Robert McDorman, consumer advocate and founder of Auto Claim Specialists, the legislation is only part of the quotation, as the rules determine whether it will deliver the indemnification legislators intended and insureds deserve.

“The Mandatory Right to Appraisal was important, but the rules are equally – or possibly more – important for the law to work as intended,” McDorman stressed.

He noted that at least 80 percent of auto claims are being significantly under-indemnified. “Every dollar below the actual loss is a dollar of under-indemnification. The purpose of insurance is to indemnify the insured for their covered loss. If the appraisal process is going to be the mechanism Texas has established to resolve disputes over the amount of that loss, then the rules need to ensure that the process is fair, accessible and independent. That is why getting them right matters so much.”

McDorman has been extremely vocal about the rules and has expressed particular concerns about provisions that could affect how umpires are selected when an insured and insurer cannot agree. One proposal considered during the rulemaking process would allow a carrier to embed a vendor-based umpire selection mechanism in its policy when the policy is issued – before any claim or dispute exists.

According to McDorman, allowing the umpire-selection process to be determined before a loss occurs could undermine one of the fundamental protections of appraisal: the use of an independent third party to resolve a dispute between the insured and insurer. “The insured should retain the express authority to make the election of an umpire at the time of submitting a claim, rather than when purchasing their policy,” he insists. “If an umpire is needed, the insured must also retain the right to seek judicial appointment. Otherwise, we risk creating a mandatory appraisal process that does not provide the independent protection the Legislature intended.”

Auto Claim Specialists encourages Texas policyholders and other interested stakeholders who support a fair and independent appraisal process to remain engaged with TDI as the rules are finalized and posted. McDorman remains optimistic that the finalized rules will include steep penalties for those who refuse to adhere to them, emphasizing, “Rules without accountability for offenders are just suggestions.”

Want more? Check out the September 2026 issue of Texas Automotive!