The appraisal clause, in one paragraph
Most Texas property policies contain an appraisal clause. It exists for one specific situation: you and your insurance company agree the loss is covered, but you disagree about HOW MUCH it will take to make you whole. Instead of a lawsuit, the clause creates a structured way to settle the number. Each side hires its own appraiser. The two appraisers pick a neutral umpire. When two of the three agree on the amount, that amount generally becomes binding on both sides.
It works in both directions
This is the part that surprises people. Appraisal is not just something you do to your insurance company. It can be done to you.
You invoke it on the carrier
Their estimate will not cover the actual repair, the adjuster will not move, and negotiations have stalled. You send written notice invoking the appraisal clause and name your appraiser. The carrier then has to name theirs and participate.
The carrier invokes it on you
You get a letter saying appraisal has been demanded and you have a limited time to name your own appraiser. This is legal and increasingly common. If this is you, the clock matters: read the demand letter guide before anything else.
What appraisal decides, and what it does not
Appraisal sets the AMOUNT of the loss. That is its whole job. It does not decide whether something is covered, whether a deadline was missed, or whether anyone acted in bad faith. Those are coverage and legal questions that stay outside the process. This boundary is actually good news for most people: it means appraisal cannot be used to take away coverage you already have. It is a fight about the number, and only the number.
The three people in the room
- Your appraiser. Named by you and paid by you, but required to remain impartial. Their job is building and defending an honest valuation of your loss.
- The carrier's appraiser. Named and paid by the insurance company, same job from their side.
- The umpire. A neutral third selected by the two appraisers (or appointed by a court if they cannot agree). The umpire only decides where the two appraisers disagree.
How the process runs
- One side invokes appraisal in writing.
- Both sides name their appraisers within the time the policy sets.
- The appraisers exchange documentation, inspect the property, and each build their valuation.
- They compare numbers and resolve what they can between themselves. Honest appraisers agree on more than you would expect.
- Whatever remains in dispute goes to the umpire. When any two of the three sign the award, the amount is set.
Timelines vary with schedules, the size of the loss, and how far apart the numbers start, but most appraisals resolve in weeks to a few months. Almost always faster than litigation.
What it costs
Each side pays its own appraiser, and the two sides typically split the umpire's fee. Any appraiser worth hiring will put their fee in writing before you commit to anything. We do.
Common questions
Generally yes, as to the amount. Courts set aside appraisal awards only in narrow circumstances. Coverage disputes remain separate and are not decided by the award.
No. Appraisal is a policy process, not a court process. If you already have an attorney or public adjuster, they will usually coordinate it. If you do not, you can invoke it and name an appraiser yourself.
Policies typically require appraisers to be impartial or disinterested, and the practical bar is competence: your number only holds up if the person behind it can defend every line of it. Look for construction knowledge, real estimating experience on Texas losses, and insurance industry credentials.
A new Texas law and its pending TDI rules are expected to standardize the appraisal process for residential property and personal auto policies, including deadlines for each step. As of this writing the rules are proposed, not final. Your policy language controls today.