The Texas Department of Insurance (TDI) recently published its Appraisal Experience Data Call Report for December 2024. This comprehensive report sheds light on the utilization and outcomes of the appraisal process in residential property and personal auto insurance claims across Texas.
With regard to property insurance, appraisal is used in fewer than 2% of all claims, its frequency has increased over the past three years, suggesting it is becoming a more recognized tool for dispute resolution.
Summary of Findings:
Claim Initiation:Â Nearly all residential property appraisals are initiated by claimants.
Outcomes:Â The average award of $33,949 often significantly exceeds the insurers initial offer, with claimants achieving additional payouts ranging between $10,800 and $28,500 in about half of cases.
Process Duration:Â Most residential property appraisals are resolved within three months, with nearly all concluding in under eight months.
Umpire Involvement:Â Umpires are used in 16% of cases, helping resolve disputes more effectively.
Expenses:Â The appraisal process costs insurers an average of just over $2,800 per case, making it a cost-effective alternative to litigation.
Litigation:Â The use of appraisals has significantly reduced lawsuits, both before and after the process, indicating its effectiveness in minimizing legal disputes.
Key Takeaway:
The 2024 Appraisal Experience Data Call Report highlights the appraisal process as a valuable mechanism for resolving insurance claim disputes in Texas. While it remains underutilized in some areas, its benefits are evident in the form of higher awards, lower litigation rates, and cost-effectiveness. As the use of appraisal continues to evolve, stakeholders—including insurers, claimants, and appraisers—can leverage these findings to enhance claims resolution practices.
Prepared By:
Charles Washkalavitch
EVP & Principal Building Consultant
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