Texas Law

The Texas Auto Insurance Appraisal Clause, Explained

The appraisal clause is a binding dispute-resolution provision found in most Texas auto policies. When you and your insurer can't agree on the amount of loss — total loss value, repair cost, or diminished value — either party can invoke it to get a final, binding answer without going to court.

What the Appraisal Clause Actually Does

Once invoked, each side names its own appraiser. The two appraisers work to agree on the amount of loss; if they can't, a neutral umpire is selected and their decision (or the agreement of two of the three) becomes binding. It settles the dollar amount of the dispute — it does not decide questions of coverage or fault.

Why This Matters for You

Before this remedy became widely standardized in Texas, policyholders had little practical leverage to challenge a lowball number short of a lawsuit. The appraisal clause gives you a faster, less expensive, binding alternative — and most policyholders, and even many repair shops, still don't know it's available to them.

Frequently Asked Questions

Can an insurance company refuse to honor the appraisal clause?
Once properly invoked under a policy that includes the clause, the process is generally binding on both parties. An insurer that resists or delays unreasonably can face additional scrutiny for doing so.
Who pays for the appraisal process?
Each party typically pays their own appraiser, and the cost of a neutral umpire (if one is needed) is usually split between both sides.

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