The mandatory right to appraisal is now law in Texas, following nearly a decade of advocacy from collision repair professionals, effective Sept. 1.

“We are so excited to have gotten this piece across the finish line,” said Jill Tuggle, Auto Body Association of Texas (ABAT) executive director. “Our team put in countless hours, and their blood, sweat, and tears went into the passage of this law. Special thanks to Robert McDorman and his legislative team, as well as Ware Wendell and Texas Watch, and Jacob Smith, who have put their heart and soul into this for the past three sessions.”

Senate Bill 458, the 2025 iteration of the legislative initiative, was filed on June 20 without Gov. Greg Abbott’s signature. In Texas, the governor can sign the bill into law, allow it to become law without a signature, or veto it.

The bill ensures all Texas insurance policies “must contain an appraisal provision” and specifies that this appraisal provision “is intended to provide a type of dispute resolution process solely to determine the amount of loss when that amount is in dispute between the policyholder and the insurer.”

It was fast-tracked through the process, obtaining unanimous approval from both the Senate and the House during every review. That was a very different outcome compared to eight years ago when legislators didn’t believe there was a need for mandatory appraisal rights, McDorman said in an Auto Claim Specialists press release.

Bills proposing mandatory appraisal rights were presented in the 2021 and 2023 sessions, but both ended before a conclusive vote.

A press release from Auto Claim Specialists states that the war against the appraisal clause began in 2015 when State Farm removed the “vital consumer protection” from their Texas policies. McDorman, a public adjuster and founder of Auto Claim Specialists, met with the Texas Department of Insurance (TDI) five times, alerting them to the potential dangers that such an action presented to drivers and their roadways, the release states. He also testified before legislative committees eight times to educate them on the impact of the appraisal clause.

“They hadn’t heard anything about it and couldn’t be convinced that it was a problem that needed their attention,” McDorman said. “Every time someone told me ‘no,’ I pushed forward. I refused to believe it was a waste of time.”

The TDI took notice, acknowledging the need for legislators to establish appraisal guidance policy in its 2022 Biennial Report. And in its Report to the 88th Texas Legislature, the Office of Public Insurance Counsel (OPIC) expressed increasing concern with “restrictions on appraisal in policy forms filed by top insurers [which] can adversely impact consumers who buy insurance to make sure damage to their property will be repaired or replaced. Without appraisal, they may be forced to choose between accepting the insurer’s offer and paying out-of-pocket for any disputed amount or taking on the costly and time-consuming burden of going to court.”

OPIC reiterated those concerns in its report to the 89th Texas Legislature, listing appraisal as its first recommendation, restating its previous position, and adding, “Restrictions on appraisal can remove an important consumer protection that saves the parties and the judicial system time and resources. Appraisal is usually the consumer’s only economically realistic option for challenging the amount an insurer offers to repair or replace property. Filing a lawsuit is expensive — often more expensive than the amount of an auto repair claim.

“Eliminating appraisal leaves the consumer stuck in the middle of a dispute between the insurer and providers over the amount of loss, resembling the balance billing trap that health insurance consumers found themselves in before the Legislature addressed that issue.” They recommended that legislators “amend the Texas Insurance Code to require personal auto and residential property insurers in Texas to preserve the insurance consumer’s right to invoke appraisal in disputes regarding the cost to repair or replace covered property.”

The press release notes that ABAT and Texas Watch also offered support and consumer and legislator awareness.

ABAT “stood shoulder to shoulder with McDorman, providing pecuniary support and volunteering time and energy to promote all three iterations of the proposed mandatory appraisal legislation,” including joining in meetings with TDI and testimony by President Burl Richards to legislative committees.

“It’s really been an eight-year journey, from that first meeting with TDI,” Richards said. “A lot of time and resources have been spent from many inside and outside our industry. Perseverance paid off, and it’s great to see what an association that stands together can achieve.”

Joe Collins, whose experience with the appraisal process yielded a large settlement from State Farm, recognized how detrimental a similar under-indemnification situation might be for others, especially those who don’t have the protections provided through the appraisal clause, according to the release. Seeing that, Collins donated his settlement money to the fight for mandatory appraisal rights.

“If that money goes toward making sure all Texas policies include the right to appraisal, then I’m helping everybody,” he said in an article published in a 2023 issue of Texas Automotive.

Collins’ story inspired many others from across the country to contribute to a GoFundMe fundraiser, creating a national movement.

“Joe’s generosity and dedication to ‘doing the right thing’ resonated with people, and they wanted to support our efforts,” McDorman said.  “Many people helped us get to where we are, but Joe’s donation was instrumental to building that momentum. I’m gratified by the passage of the bill, which demonstrates that I was a worthy steward of his trust.”

The release says that other public adjusters, multiple law firms, and lobbyists donated time, money, and energy to support the cause.

“We went up against really big odds; the insurance industry has deep pockets, which enables them to walk all over people most of the time,” McDorman said. “Often, that happens because we are afraid to fight them; we’re afraid to lose. But when you’re doing the right thing for the right reason, it’s worthwhile to keep going, to continue the fight to make a difference. That’s what we did, and our efforts paid off – this was the people’s fight…and the people fought and won!”

Washington State Gov. Bob Ferguson signed a right-to-appraisal bill into law in May after six years of advocating. The bill was amended to strike language that would’ve required insurance companies to reimburse policyholders for the appraisal process if the loss determined through the process is $500 or more than what the insurance company adjusted. Advocates for the bill expressed concerns that it would not have passed without the amendment.

A similar bill was also recently introduced in the New Jersey Senate.

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