Texas TDI Proposes Amendments to Auto Bill of Rights

Proposed amendments by the Texas Department of Insurance (TDI) aim to incorporate the appraisal rights of Senate Bill 458 into the Auto Bill of Rights. If enacted, this will ensure that all auto policyholders in Texas receive written notification of their ability to request an independent appraisal to resolve disagreements over loss amounts. These changes are part of amendments to 28 TAC §§5.9970 and 5.9971, issued in Austin on May 1, 2026. They are a continuation of TDI's SB 458 rulemaking process, implementing legislative measures from the 89th Texas Legislature's 2025 session, including SB 458, SB 1238, SB 1644, and HB 2067.

SB 458 introduced Chapter 1813 to the Insurance Code, mandating that specific personal auto and residential property policies include provisions for appraisals to address disputes over loss valuations. This requirement will become part of the newly proposed Auto Bill of Rights, effective for policy distribution by November 1, 2026. From this date, policyholders will be explicitly informed about their right to independent appraisal upon initial policy issuance and renewal.

The introduction of this requirement is set to increase consumer awareness and subsequently the demand for appraisals. The new disclosure is expected to have a notable impact on businesses such as auto repair shops. Insurers will need to update both their internal processes and systems to comply with the new disclosure requirements. According to the Texas Workforce Commission, compliance officers and programmers can expect median hourly wages of $34.64 and $38.85, respectively, with compliance and system update tasks estimated to take four to ten hours each.

The TDI has indicated that there would be no significant financial impact on local or state governments, and no substantial effects on local employment are anticipated. These amendments ensure uniform applicability of Insurance Code §501.156 to all insurers, leading TDI to reject alternatives like exemptions for small businesses or varying rules for different business sizes.

Public comments on these proposals are invited until June 15, 2026, through email or mail. Requests for public hearings need to meet the same deadline. These amendments follow years of efforts by the Auto Body Association of Texas, public insurance adjusters, and consumer advocacy groups, initiated after State Farm removed its appraisal clause in 2015. The updated Bill of Rights is a significant step towards operationalizing appraisal rights for consumers. For more details, the full proposal can be accessed via TDI's website.