Texas Vehicle Appraisal Resources

Texas total-loss vehicle valuation requirements are established by the Texas Department of Insurance (TDI) through the Texas Administrative Code. Insurers handling automobile insurance claims in Texas are subject to TDI's claim handling standards and the requirements of the Texas Insurance Code.

Under Texas regulations, when a vehicle is declared a total loss, the insurer must pay the Actual Cash Value (ACV) of the vehicle at the time of the loss. ACV is generally defined as the fair market value of the vehicle — the amount a willing buyer would pay a willing seller — taking into account the vehicle's year, make, model, trim, mileage, condition, and options.

When an insurer uses a computerized valuation system or third-party valuation service to determine ACV, the insurer must be able to support the valuation with comparable vehicles available in the relevant market area. The insured has the right to review the valuation methodology and to dispute the valuation.

Texas title requirements are separate from an insurer's total-loss determination. An insurance total-loss payment does not, by itself, mean that a vehicle requires a salvage or nonrepairable title. The applicable title requirements depend on whether the vehicle meets Texas's statutory definitions and any applicable exceptions. Consult TxDMV's guidance for the requirements that apply to the vehicle's circumstances.

Whether a Texas total-loss settlement must include sales tax, title fees, or registration fees depends on the applicable regulations and the specific circumstances of the claim. Policyholders with questions about what their settlement should include should consult the applicable policy and a qualified attorney.

Texas enacted Insurance Code Chapter 1813 — Appraisal of Disputed Losses — through Senate Bill 458 of the 89th Legislature (2025). The legislation became effective September 1, 2025. Under Section 2 of the Act itself, Chapter 1813 applies only to an insurance policy delivered, issued for delivery, or renewed on or after January 1, 2026. This policy-applicability date is established by the Act, not by TDI guidance. Because it is now 2026, this statutory requirement is currently applicable to qualifying policies issued or renewed on or after January 1, 2026.

Scope (§ 1813.001): Chapter 1813 applies to personal automobile and residential property insurance policies delivered, issued for delivery, or renewed in Texas by the insurer types listed in § 1813.001(a), including capital stock companies, mutual companies, county mutual companies, Lloyd's plans, reciprocal or interinsurance exchanges, farm mutual companies, eligible surplus lines insurers where Texas is the insured's home state, and the FAIR Plan Association. The chapter does not apply to policies issued by the Texas Windstorm Insurance Association or to commercial insurance policies (§ 1813.001(b)). Questions about whether a specific policy is subject to Chapter 1813 should be directed to a qualified attorney.

Required appraisal provision: The Texas Insurance Code requires that insurance policies within the scope of Chapter 1813 contain an appraisal provision complying with the chapter. This is a statutory mandate — not merely a policy-based right — for qualifying policies issued or renewed on or after January 1, 2026.

Purpose of appraisal: The appraisal process under Chapter 1813 is intended to determine the amount of loss when the policyholder and insurer disagree over that amount. Appraisal does not determine insurance coverage or alter applicable policy terms. The scope of appraisal is limited to the amount of loss — it does not resolve coverage disputes, liability questions, or other legal issues.

Appraiser and umpire requirements: Chapter 1813 itself does not specify appraiser or umpire qualifications, selection procedures, or expense-sharing arrangements. Section 1813.002 directs the TDI Commissioner to adopt rules necessary to implement the chapter, including rules establishing the period in which an appraisal must be completed and rules mandating appraisal for total loss and damage. In adopting those rules, the Commissioner must consider the qualifications and selection of appraisers and umpires. The procedural details — including any competent/impartial qualification requirements, appraiser selection procedures, and expense-sharing — are therefore delegated to TDI implementing rules, not established by the statute itself. Those rules have been proposed but are not yet confirmed as final (see below).

Umpire procedure: Chapter 1813 does not itself specify the umpire selection procedure, umpire qualifications, or umpire expense-sharing. Those details are delegated to TDI implementing rules under § 1813.002. The proposed rules at 28 TAC §§ 5.9800–5.9806 address these details, but those rules are not yet confirmed as final. Until final rules are in effect, the procedural details for umpire selection and expense-sharing under Chapter 1813 are governed by the applicable policy's appraisal provision, to the extent consistent with the statute.

Binding effect: Except for the statutory exceptions set forth in Chapter 1813, the amount of loss determined through the appraisal process is binding on the parties. The chapter identifies specific circumstances in which the appraisal award may not be binding. Readers should consult the full text of Chapter 1813 and a qualified attorney for the specific exceptions and their application to a particular claim.

Proposed implementing regulations: TDI filed the proposed rules at 28 TAC §§ 5.9800–5.9806 on April 23, 2026. The proposal was published on May 8, 2026. The proposal specified a written-comment deadline of June 8, 2026, at 5 p.m. Central. The TDI rules index, which displays a last-updated date of October 9, 2026, shows the Adoption Filed, Adoption Publishes, and Effective Date columns as empty for these rules; empty fields in that index do not independently establish that no subsequent adoption exists. This page does not treat those proposed rules as currently binding requirements. Readers should check the current adoption status at the TDI rules index (https://www.tdi.texas.gov/rules/2026/index.html) or the Texas Register. Until final rules are in effect, the procedural details for appraisal under Chapter 1813 are governed by the applicable policy's appraisal provision, to the extent consistent with the statute.

For policies outside the scope of Chapter 1813 — for example, policies issued or renewed before January 1, 2026, or policy types not covered by the chapter — the availability of appraisal may depend on whether the policy contains an appraisal provision and whether the specific dispute falls within the scope of that provision. Questions about whether Chapter 1813 applies to a specific policy or claim should be directed to a qualified attorney.

Diminished value claims in Texas depend on the type of claim and the applicable policy language. Texas courts have addressed diminished value in both first-party and third-party contexts.

Third-party diminished value: Texas courts have recognized that a vehicle owner may recover diminished value from an at-fault third party as part of the damages for negligent damage to personal property. This is consistent with the general principle of Texas tort law that a plaintiff is entitled to be made whole for all damages proximately caused by the defendant's negligence.

First-party diminished value: Whether diminished value is recoverable under a first-party collision or comprehensive claim depends on the language of the insured's own policy. Texas courts have generally held that first-party diminished value recovery depends on the specific policy language. Many standard automobile insurance policies do not expressly provide for diminished value recovery under first-party coverages.

Questions about diminished value recovery in a specific claim should be directed to a qualified attorney familiar with Texas insurance and tort law.

For qualifying policies subject to Insurance Code Chapter 1813, the chapter establishes requirements for appraiser and umpire qualifications, including that each must be competent and impartial. Texas does not have a separate licensing scheme for independent vehicle appraisers who participate in automobile insurance appraisal proceedings.

Texas does license public insurance adjusters under the Texas Insurance Code. A public adjuster is not the same as an independent vehicle appraiser in the context of an automobile insurance appraisal proceeding. The roles and regulatory requirements are distinct.

Under Chapter 1813, each party bears the cost of its own appraiser, and the cost of the umpire is shared equally. For policies not subject to the chapter, appraisal expense allocation is governed by the applicable policy language.