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The Appraisal Process

How the Appraisal Process Works

A step-by-step overview of the Texas property insurance appraisal process — from invoking the clause to issuing a binding award.

8 min read Updated 2025 By Rene Goodall, IAUA Member
01Appraisal Is Invoked02Each Party Names an Appraiser03Appraisers Coordinate and Select an Umpire04Inspection and Documentation Review05Estimate Exchange and Appraiser Negotiation06Binding Award Is IssuedFAQ

The appraisal clause is a well-established contractual mechanism in most Texas property insurance policies. When the parties cannot reach agreement on the amount of a covered loss, either the insured or the insurer may invoke this provision to resolve the dispute through a structured, independent process — without litigation. This guide explains how that process works from start to finish.

Step 01 · Day 1

Appraisal Is Invoked

Once the insured and carrier are unable to agree on the amount of loss, either party may invoke appraisal by sending a written demand, subject to the specific policy requirements.

  • The demand should identify the claim, policy, property, and disputed amount of loss items.
  • The demand must be in writing. Certified mail is standard practice, establishing a clear record of when the process was initiated.
  • No standard form is required—a written statement referencing the policy number and claim number and invoking the appraisal provision is sufficient.
  • Once properly invoked, both parties are obligated under the policy to participate in the process in good faith.

Note

Both parties should review the appraisal provision in their policy carefully before invoking it. Timing requirements, appraiser qualifications, and procedural steps vary by policy form.

Step 02 · Days 1–20

Each Party Names an Appraiser

After the appraisal demand is received, each party selects and identifies its appraiser within the timeframe required by the policy, commonly within 20 days.

  • The appraisers should be competent, impartial, disinterested, or otherwise qualified as required by the applicable policy language.
  • Each appraiser is responsible for independently establishing the amount of loss from their appointing party's position, based on their own inspection and analysis.
  • Both appraisers must be disinterested, meaning they cannot have a direct financial stake in the outcome beyond their professional fee.
  • Appraiser qualifications matter significantly. Experience in property damage estimation, construction costs, and insurance appraisal practice produces more reliable results for both sides.

Note

Appointing a qualified appraiser promptly after the demand is made keeps the process on schedule and avoids delays that frustrate both parties.

Step 03 · Days 20–30

Appraisers Coordinate and Select an Umpire

Once both appraisers are named, the appraisers communicate, exchange basic claim information, and select a neutral umpire.

  • Although the umpire may not be needed if the appraisers reach an agreement, selecting the umpire before inspection is a best practice because it helps avoid delays if disputed items remain later in the process.
  • Both appraisers should collaborate to identify qualified umpire candidates based on experience in property damage estimation and insurance claims practice.
  • If the appraisers cannot agree on an umpire candidate, either party may petition the district court to appoint one.
  • A qualified umpire should have demonstrable experience in property damage estimation and insurance claims practice, not just general construction knowledge.

Note

Early umpire selection reduces overall timeline and prevents last-minute scheduling conflicts if the process advances to umpire review.

Step 04 · Days 30–45

Inspection and Documentation Review

The appraisers inspect the property, review the carrier estimate, demand estimate, photos, measurements, repair documentation, and any other supporting materials.

  • The purpose of this step is to identify the disputed scope and pricing issues and determine what is required to establish the amount of loss.
  • Each appraiser conducts a detailed on-site inspection, documents the damage, and reviews all available supporting documentation provided by both parties.
  • The appraisers may jointly inspect or separately inspect, depending on the parties' preferences and policy requirements.
  • Thorough documentation at this stage—photographs, measurements, supporting cost data—supports a clear position and may reduce items needing umpire review.

Note

Both parties benefit from providing their appraiser with complete documentation: the original claim file, the policy, any existing estimates, photographs, and repair records.

Step 05 · Days 45–60

Estimate Exchange and Appraiser Negotiation

After the inspection, each appraiser prepares or revises their estimate and exchanges their position with the opposing appraiser.

  • The appraisers then attempt to resolve the amount of loss, including scope, pricing, depreciation, and applicable ACV/RCV values.
  • Items on which the appraisers reach agreement are settled. Only the remaining disputed items are submitted to the umpire.
  • Direct appraiser-to-appraiser communication during this phase often resolves many items without umpire involvement, saving time and cost.
  • Each appraiser should document their reasoning and be prepared to defend their positions if the matter proceeds to umpire review.

Note

Professional, good-faith negotiation between appraisers often results in partial or complete resolution without umpire involvement.

Step 06 · Days 60–90+

Binding Award Is Issued

If the appraisers are able to resolve all disputed items, the binding appraisal award can be issued by the two appraisers without the umpire's involvement.

  • If disputed items remain, those differences are submitted to the umpire for review, and a binding award is issued once any two members of the panel agree, either both appraisers or one appraiser and the umpire.
  • The umpire may conduct their own inspection, review both appraisers' estimates, and request clarification from either side before reaching a conclusion.
  • The award establishes the amount of loss, subject to any applicable policy terms, conditions, limits, deductibles, or coverage positions.
  • The entire appraisal process—from demand to award—typically takes 30 to 90 days, compared to 12 to 24 months for litigation.

Note

Both parties should retain a complete file of all appraisal documents—correspondence, estimates, the signed award, and any supporting materials—for their records.

Typical Timeline at a Glance

Appraisal clause invokedDay 1
Both appraisers appointedDays 14–30
Property inspections completeWeeks 2–4
Umpire selected (if needed)Weeks 3–5
Binding award issuedWeeks 4–8
Payment due per policy termsPer policy / statute

Typical appraisal timeline: 30–90 days, compared to 12–24 months for litigation.

What to Expect

Clear Communication

We keep you informed at every step.

Detailed Inspections

Thorough documentation of all damages.

Fair & Impartial

Neutral professionals handling your file.

Stronger Outcomes

Defensible awards that stand up to scrutiny.

Frequently Asked Questions

Does completing the appraisal process affect the right to pursue other remedies?

In Texas, appraisal and litigation address different questions. The appraisal process resolves the 'amount of loss.' Separate legal claims — such as those related to coverage disputes or claims handling — are generally not foreclosed by completing the appraisal.

How much does the appraisal process cost?

Each party pays their own appraiser's fee. The umpire's fee is split equally between the parties. Total costs vary by claim complexity, but are generally a fraction of what litigation would cost either side. REG Consulting provides transparent fee quotes before engagement.

Can a public adjuster serve as the insured's appraiser?

A public adjuster working on a contingency fee arrangement may be challenged as an 'interested' party under the policy's disinterestedness requirement. Parties should consult their policy language and consider appointing a fee-based, independent appraiser to avoid this issue.

What happens if one party does not participate after a valid demand?

Failure to participate in the appraisal process following a valid demand may constitute a breach of the policy contract. The other party may seek a court order compelling participation.

Is appraisal available for commercial property claims?

Yes. Most commercial property policies contain an appraisal or arbitration clause. The process is similar to residential appraisal, though commercial claims often involve greater complexity in scope and valuation.

Can the insurer invoke the appraisal clause?

Yes — either party may invoke the clause. The appraisal process is a mutual contractual right, available to both the insured and the insurer when a genuine dispute over the amount of loss exists.

Need a Qualified Appraiser or Umpire?

REG Consulting serves as appointed appraiser or neutral umpire for both insureds and carriers across Texas — providing the same standard of independent, defensible analysis to every engagement.

Request an Appraisal(936) 693-3281

We respond within 1 business day · Serving all of Texas

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