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Texas auto insurers required to provide appraisal data by July 12

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The Texas Department of Insurance (TDI) has called for the submission of vehicle appraisal data from personal auto insurance companies to determine how often they’re used and their impact on claims.

“Appraisal has been a notable topic of public policy discussion in recent years, including as the subject of multiple bills during the 88th Legislative regular session in 2023 and invited testimony before the House Insurance Committee in September 2022,” the TDI wrote in its request.

TDI said it’s collecting this information because while appraisal is widely allowed in policy forms, they’ve found insurers don’t routinely collect and report appraisal data. The data call also includes residential property insurance.

“Accordingly, there is very little publicly available data to help understand how and when appraisal is used and what impact it has,” TDI said.

Insurance companies must submit both aggregate and claim-level data of each completed appraisal for July 2020-June 2021, July 2021-June 2022, and July 2022-June 2023.

Among the items that will be provided in the claim-level data are:

    • Cause of loss;
    • Whether or not the claim was deemed a total loss;
    • Date and name of party that requested an appraisal;
    • Insurer’s initial offer amount;
    • Claimant’s initial demand or counteroffer;
    • Appraisal award amount;
    • Whether or not an umpire was used;
    • Amount of insurer’s appraisal expenses including share of any umpire fees and costs; and
    • Amount of claimant’s appraisal expenses known to the insurer, such as the claimant’s share of umpire fees and costs.

The top 10 auto insurers in Texas — Allstate, Berkshire Hathaway Group (GEICO’s parent company), Farmers Insurance, Home State Insurance Group, Incline Property and Casualty Group, Liberty Mutual, Progressive, State Farm, Texas Farm Bureau Mutual Group, and USAA — are required to submit the data by July 12.

TDI says auto insurance companies must report data for all personal automobile policies or policies otherwise reported under the Texas Private Passenger Automobile Statistical Plan, including mobile homeowner policies issued using a personal automobile policy.

In January 2023, the Texas Office of Public Insurance Council (OPIC) recommended to the state’s legislature that the right to appraisal on insurance claims be a mandatory part of policies.

Many car insurance policies include an appraisal clause that policyholders can invoke to have a third-party appraisal done when they don’t agree with their carrier’s valuation of their vehicle or damages. Low valuations often lead to improper indemnification for loss, and in some cases can lead to total loss determinations on vehicles that could otherwise be fixed. Both the carrier and the policyholder hire an independent appraiser and if the appraisers can’t agree, an umpire is selected to make the final decision.

However, OPIC notes in its January report to the legislature that it is “increasingly concerned with restrictions on appraisal in policy forms filed by top insurers.”

One bill during the 2023 regular session, HB 1437, that would have mandated the right to appraisal passed in the House and was recommended for passage by the Senate Business & Commerce Committee. The full Senate didn’t vote on the bill before the session ended.


Featured image credit: kebudfam/iStock

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