Could Texas Insurance Be Changed Under New Proposals?
Mandatory Appraisal Process Rules
Texas insurance regulators are trying to make the claims dispute process fairer for homeowners by forcing carriers to issue appraisal provisions, a process made mandatory as of September 1 under Senate Bill 458. The Texas Department of Insurance has recently published new draft mandatory appraisal rules for both personal auto and homeowner insurance, which were open to public comment until Monday, October 6.
Detailed Appraisal Requirements
Under the draft rules, every policy must allow either insurer or policyholder to unilaterally demand an appraisal, apply to disputes about the amount of loss or damage, including partial or total loss, and require the appraisal award to be binding. A demand for appraisal must be made in writing within one year from when the insurer accepts coverage; each party must hire its own appraiser within 30 days; and the two appraisers must attempt to agree within 180 days.
Rate Increase Limitations Proposed
Senate Bill 1643, which has cleared the Senate but awaits a committee hearing in the House, would require the insurance department to approve any rate increase above 10% before it can go into effect. Currently, Texas operates under a "file and use" system where insurers can implement rate increases immediately, with regulators reviewing them after the fact.
Enhanced Disclosure Requirements
HB 2067 requires companies to give insurance policyholders and applicants a written statement explaining why an insurance policy was declined, canceled, or nonrenewed, effective January 1, 2026. New rules also prohibit insurance companies from tying together the sale of personal automobile and residential property policies.
Credit Score Review Requirements
SB 1644 requires insurers to review and update all insureds' credit reports every three years, reassess the insured's policy rating, and adjust premiums based on the insured's updated credit score, effective September 1, 2025.
Potential Impact on Texans
If implemented successfully, Texas could become a model for other states where homeowners have expressed frustration against carriers underpaying or denying damage claim repayments. These changes are particularly significant for Texas homeowners who currently pay some of the highest insurance premiums in the country, with average costs reaching $4,049 per year for a $300,000 policy—around $1,700 more than the national average.
The proposals represent a substantial shift toward consumer protection in Texas's insurance market, potentially fundamentally changing how disputes are resolved and rates are determined.