How to Invoke the Appraisal Clause in Your Texas Insurance Policy

When your Texas insurance company offers far less than your property damage actually costs to repair, you have a powerful tool available that most policyholders never use: the appraisal clause.

This article walks you through exactly what the appraisal clause is, when you can use it, and how to invoke it properly.

What Is the Appraisal Clause?

The appraisal clause is a provision found in most Texas homeowner and commercial property insurance policies. It provides a contractual mechanism for resolving disputes over the amount of loss — meaning how much your claim is worth.

It is not a coverage dispute tool. If your insurer is denying coverage entirely, the appraisal clause typically cannot help. But when you both agree there was covered damage and simply disagree on how much it costs to fix, the appraisal clause is your right to demand an independent resolution.

When Can You Invoke It?

You can invoke the appraisal clause when:

• Your insurer has made a settlement offer you believe is too low
• There is a disagreement about the scope of damage (what was damaged)
• There is a disagreement about the cost of repairs or replacement
• Your insurer has denied additional amounts you believe are owed

Most Texas policies require that there be an actual dollar dispute — not just the potential for one. Once your insurer has made an offer or denied your supplement request, you generally have standing to invoke.

The Three-Party Structure

The appraisal process uses three independent parties:

1. Your appraiser — appointed by you; advocates for your documented damage
2. The insurer's appraiser — appointed by the carrier; represents their position
3. The umpire — a neutral third party called in only if the two appraisers cannot agree

Any two of the three parties agreeing creates a binding award. In most cases, the two appraisers reach agreement without ever involving the umpire.

Step-by-Step: How to Invoke the Clause

Step 1: Read Your Policy

Find the appraisal clause in your policy (usually in the "Conditions" section). It will describe:

• Who can invoke it and when
• How appraisers must be qualified ("competent and disinterested")
• How the umpire is selected if needed
• How costs are split (each party pays their own appraiser; umpire is split 50/50)

Step 2: Document Your Disagreement

Before invoking, be clear about what you're disputing. Gather:

• The carrier's estimate or denial letter
• Any contractor bids or independent estimates you have
• Photos and documentation of the damage

Step 3: Write Your Demand Letter

Your demand for appraisal must be in writing. Here is the essential language:

"Pursuant to the appraisal clause in [Policy Number], we hereby demand appraisal of the amount of loss for the claim filed on [Date of Loss]. We will be appointing [Name or Firm] as our appraiser. Please advise the name and contact information for your appointed appraiser within [14 days or per your policy timeframe]."

Send this certified mail to your insurer's claims department. Keep the tracking number.

Step 4: Appoint Your Appraiser

Your appraiser must be "competent and disinterested" — meaning they cannot have a financial interest in the outcome beyond their professional fee. This is why public adjusters cannot serve as your appraiser (they have a percentage fee interest).

REG Consulting serves as a policyholder-side appraiser for Texas claims. We are Texas-licensed, Xactimate-certified, and experienced in representing both sides of the appraisal process.

Step 5: Let the Process Run

Once both appraisers are appointed:

• They will each inspect the property (sometimes jointly, sometimes independently)
• They exchange their estimates and negotiate toward an agreed amount
• If they cannot agree on disputed items, they invoke the umpire

This process typically takes 30 to 90 days from appointment.

Step 6: The Binding Award

Once two of the three parties sign the award, it is binding under Texas insurance law. Your insurer must pay within the policy's payment terms, typically 5 business days after agreement.

Common Mistakes to Avoid

Don't wait too long. Some policies have deadlines for invoking appraisal. If your claim has been open for months with no resolution, invoke now.

Don't appoint someone with a financial interest. Using your contractor, public adjuster, or attorney as your appraiser can invalidate the process.

Don't skip the certified mail. A verbal request or email is not sufficient in most policies. Written demand via certified mail creates a paper trail.

Don't confuse appraisal with litigation. The appraisal process resolves the amount of loss only — not coverage disputes. If your carrier denies coverage, you may need an attorney.

How Much Does It Cost?

You pay your appraiser's fee. If an umpire is needed, the cost is split equally between the parties.

Compared to litigation — which averages 12–24 months and tens of thousands in attorney fees — appraisal is dramatically cheaper and faster.

Ready to Invoke?

If you're in a dispute with your Texas insurer over the amount of your claim, REG Consulting can serve as your appointed appraiser. We conduct professional property inspections, prepare Xactimate estimates, and represent your documented damage through the full appraisal process.

Contact REG Consulting or request an appraisal to get started.