Appraisal and Umpire Process for Commercial Property Claims in Texas
When you and the insurer disagree about the amount of a commercial property loss, the policy may provide an appraisal process. The clause itself is the starting point.
Commercial property losses
Read the appraisal clause first.
The clause describes how appraisal is demanded, who picks the appraisers and the umpire, and what they decide.
- Appraisers
- Umpire
- Award
If the policy has an appraisal clause, read it before demanding or agreeing to appraisal. It usually describes the demand, how each side names an appraiser, how an umpire is chosen, and how an award is made.
How a typical appraisal clause works
- DisagreementYou and the insurer disagree on the amount of loss.
- DemandOne side demands appraisal in writing, as the clause requires.
- AppraisersEach side names its own appraiser.
- UmpireThe appraisers select an umpire, or ask a court if they cannot agree, if the clause provides for that.
- AwardAn agreement in writing by two of the three sets the amount.
The steps above are a common pattern, not the rule for every policy. Your policy's wording controls.
What appraisal can and cannot decide
Appraisal is usually about the amount of loss. Questions about coverage, and in some cases about what caused the damage, can raise legal issues. Talk to a lawyer before you start. See post-appraisal defenses.
Appraiser and umpire qualities
Many clauses require the appraisers to be competent and disinterested, and the umpire to be impartial. See biased appraisers and umpires.
Large property considerations
- Will the award be made by building, by line item, or as one total?
- Have you and the insurer agreed on scope for some buildings already?
- How will the appraisers inspect a large site, and on what schedule?
Questions to ask before you invoke or agree
- What exactly does the clause say about the demand, the appraisers and the umpire?
- Is the disagreement about amount, or about coverage?
- How will appraisal costs be shared under the policy?
- Are there deadlines for suit that keep running?
See Texas property insurance lawsuit deadlines.
About my background
Before I practiced law, I spent years on the property side of insurance claims. I was previously licensed and worked as a public adjuster, roofing contractor, home inspector and contractor, and I inspected and estimated large residential and commercial properties with many buildings. I also served as an appraiser, an umpire and a retained witness in first-party insurance disputes. I never worked for an insurance company.
Today I'm an attorney licensed in Texas and Alabama. I'm also a Florida mediator, but I don't practice Florida law. Every case is different, and no result can be promised.
Other states. The rules for a property in another state can differ. I am licensed to practice law in Texas and Alabama only, and I do not practice Florida law.
Frequently asked questions
What is an appraisal clause?
A policy provision that lets either side ask for an appraisal process when they disagree about the amount of loss. The clause describes the steps.
Who is an umpire and how is one chosen?
The umpire is a third person who decides issues the two appraisers cannot agree on. Many clauses have the appraisers choose the umpire and allow a court to appoint one if they cannot agree.
Is the appraisal award final?
Many clauses make an award binding on the amount of loss, but legal questions can remain, such as coverage. Talk to a lawyer about your situation.
Can both sides use their own appraiser?
Yes. Most appraisal clauses provide that each side names its own appraiser.
Does appraisal replace a lawsuit?
Not always. Appraisal usually decides the amount of loss, while other disputes may still need to be resolved. Suit deadlines may keep running.
Related pages
Michael P. Bowman is licensed to practice law in Texas and Alabama only. The firm's office is in Austin, Texas; the firm does not have a bona fide office in Alabama. Law Office of Michael P. Bowman PLLC (The Claim Attorney), 7903 Entrada Cove, Austin, TX 78730. (512) 352-9937. Last updated October 29, 2026.
General information, not legal advice. Contacting us does not create an attorney-client relationship. Responsible attorney: Michael P. Bowman, Austin, Texas.
