Texas House Committee Backs Mandatory ’Loser Pays’ Auto Insurance Appraisal Clauses

The Texas House Insurance Committee on Tuesday voted 5-4 to recommend fellow lawmakers pass a bill mandating appraisal clauses in auto insurance contracts.

House Bill 2534 would institute another option for insurers and policyholders to resolve claim cost disputes without having to go to court.

It would allow either side to exercise a right to appraisal to determine the amount an insurer should reimburse on a repair bill or a totaled vehicle.

If the right-to-appraisal process produces a total loss or repair cost valuation $1 higher than the insurer’s last offer, the insurer must pay the customer’s appraiser fees and expenses.

If the insurer’s last offer was deemed ‘just,’ House Bill 2534 would have the customer pay the insurer’s appraiser fees and expenses.