The bill, H.B. No. 345, introduces a new chapter, Chapter 2009, to the Texas Insurance Code, establishing a formal appraisal process for disputed losses under residential property insurance policies. This chapter applies to various types of insurers, including capital stock, mutual, and farm mutual insurance companies, as well as the FAIR Plan Association, but explicitly excludes the Texas Windstorm Insurance Association and commercial insurance policies. The bill outlines the procedures for initiating an appraisal demand, selecting appraisers, and determining the amount of loss, including the roles of appraisers and umpires in the process. It also stipulates that appraisal provisions in insurance policies must comply with the new chapter and that the requirements of this chapter take precedence over conflicting terms in existing policies.

Additionally, the bill specifies that the appraisal process must be completed within certain deadlines, with provisions for extensions in cases of weather-related catastrophes. It mandates that appraisal expenses be shared equally between the policyholder and insurer, while also detailing the conditions under which the appraisal process may be terminated. The amount determined through the appraisal process is binding on both parties, but does not affect other rights under the policy or law. The provisions of this chapter will apply to insurance policies issued or renewed on or after January 1, 2026, and the act will take effect on September 1, 2025.

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