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 also has a Total Loss Vehicle program administered by the Texas Department of Motor Vehicles (TxDMV), which governs the titling and branding of total-loss vehicles. A vehicle that has been declared a total loss and for which an insurance payment has been made must receive a salvage or non-repairable title, depending on the extent of damage.

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. The Texas Department of Insurance (TDI) has stated that personal automobile policies issued or renewed after January 1, 2026 must include the appraisal provision required by Chapter 1813. These are two distinct dates: the legislation's effective date (September 1, 2025) and TDI's stated policy-applicability date (January 1, 2026). 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 the policy types within the scope defined by § 1813.001. TDI has identified personal automobile policies as within the chapter's scope. Whether a specific policy or claim type falls within the chapter's scope depends on the applicable statutory definitions. 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 requirements: Under Chapter 1813, when appraisal is demanded, each party selects a competent and impartial appraiser. The chapter establishes requirements for appraiser qualifications. Each party is responsible for the cost of its own appraiser.

Umpire procedure: If the two appraisers cannot agree on the amount of loss, they select a competent and impartial umpire. The chapter establishes the procedure for umpire selection. The cost of the umpire is shared equally between the parties.

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 proposed rules at 28 TAC §§ 5.9800–5.9806 in 2026 to implement Chapter 1813. As of the date of this page, those rules have been proposed but their final adoption and effective date have not been independently verified through an official TDI or Texas Register source. This page does not describe those proposed rules as final regulations. Readers should check the current status of those rules at the TDI website or the Texas Register.

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.