IMPACT OF AUTO APPRAISAL
Too often, insurance companies undervalue auto claims. In most policies, consumers
and insurers can hire an independent appraiser to resolve disputes regarding the
cost to repair or the value of a total loss. Some insurance companies are trying to
take the right to appraisal out of policies, which will financially hurt policyholders.
HB 1437 by Clardy and SB 554 by Hughes will make fair appraisal mandatory in
Texas auto policies.
Texas Watch analyzed 1,246 auto insurance claims settled through independent
appraisers. Please see Appendix A for our methodology.
Here are the key findings:
MARCH 2023
$5,307.35
Average difference between appraisal award
and insurance offer for repair claims
(p. 2)
$3,889.27
Average difference between appraisal award
and insurance offer for total loss claims
(p. 2)
Total amount that appraisal increased the
settlement across all claims analyzed
(p. 2)
The average amount
insurers undervalue
claims has
$5,081,431.83
INCREASED
in the last 4 years
(pp. 4 & 6)
131%
Appraisal increased
settlement
amounts by
for repair
claims on
average and
26%
for total loss
claims on average
(p. 2)
SUPPORT HB 1437 BY CLARDY & SB 554 BY HUGHES!
Leg. advertising paid for by Ware Wendell, Executive Director, Texas Watch,
P.O. Box 42198, Austin, TX 78704.
Report Authors:
Ware Wendell, Executive Director
wwendell@texaswatch.org
Kelly Taft, Director of Organizing
ktaft@texaswatch.org
$3,872
The top 5 insurers in
Texas undervalued
repair claims by
on average
and total loss
claims by
$5,006
on average
(pp. 3 & 5)
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 2
Too often, insurance companies offer consumers too little to repair or replace
their vehicle. Fair auto insurance appraisal allows consumers and insurers to
determine the cost to repair vehicles or the value of the total loss. The Texas
Department of Insurance includes establishing policy form appraisal guidance as a
policy consideration for the 88th Texas Legislature in their 2022 Biennial Report. [1]
The Office of Public Insurance Counsel recommends preserving the right to invoke
the appraisal clause. In their Report to the 88th Texas Legislature Recommendations
Report, they state, "Without appraisal, they [consumers] may be forced to choose
between accepting the insurer's offer and paying out-of-pocket for any disputed
amount, or taking on the costly and time-consuming burden of going to court, while
repairs to their auto or home remain in limbo." [2]
THE PROBLEM
THE SOLUTION
The 88th Texas Legislature has an opportunity to protect the right to a fair auto
appraisal. HB 1437 by Rep. Clardy and SB 554 by Sen. Hughes make fair auto
appraisal mandatory in Texas auto policies, establishing clear guidance for insurers
and consumers.
In 2015, TDI approved a form submitted by State Farm, which eliminated the right
to invoke the appraisal clause for repair claims in its Texas policies. [1, 3] In 2022,
GEICO filed a similar form to remove the right to invoke appraisal, which TDI
rejected, as it did not have sufficient information. [1, 4]
Repair Claims
Total Loss Claims
All Claims
Average Amount
Undervalued
$5,307.35
$3,889.27
$4,078.20
Percent Claim
Payout Increase
131%
26%
40%
Claims Analyzed
166
1,080
1,246
Total Amount
Undervalued
$881,020.32
$4,200,411.51
$5,081,431.83
Fair auto insurance appraisal allows cars to be repaired safely or vehicles to be
valued accurately in the event of a total loss. The chart below shows the average
differences between the appraisal award and the insurance offer ("average amount
undervalued"), the percentage that the claim payout increased, the number of
claims analyzed, and the total amount undervalued.
Insurance
Company
Market Share in
Texas [Appendix C]
Average Amount
Undervalued
Count of Claims
Analyzed
Progressive
16.06%
$4,456.08
38
State Farm
13.86%
No Appraisal in
Policies
No Appraisal in
Policies
GEICO
13.49%
$4,993.46
40
Allstate
10.57%
$4,891.60
21
USAA
6.85%
$7,975.24
8
Other
-
$5,854.67
59
Top 5 Insurers
Total
60.83%
$5,005.56
107
East Texas
$5,502.57
(N=96)
West Texas:
$8,218.26
(N=2)
HOW MUCH DO THE TOP INSURANCE COMPANIES IN TEXAS
UNDERVALUE REPAIR CLAIMS ON AVERAGE?
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 3
North Texas
$5,192.18
(N= 51)
Central Texas
$2,612.91
(N=6)
This graphic illustrates
the average difference
between the appraisal
award and the insurance
offer based on the
location of the
policyholder. N
represents the number of
claims analyzed. To see
which cities were
included in each region,
please visit Appendix B.
South Texas
$7,844.88
(N=3)
HOW MUCH DO INSURANCE COMPANIES UNDERVALUE REPAIR
CLAIMS IN DIFFERENT REGIONS OF TEXAS ON AVERAGE?
HOW MANY PEOPLE RECEIVED LOWBALL OFFERS FOR THEIR
REPAIR CLAIM AND BY HOW MUCH?
HOW MUCH HAS THE AVERAGE DIFFERENCE BETWEEN THE
APPRAISAL AWARD AND INSURANCE OFFER VARIED OVER THE
YEARS?
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 4
From the data we collected on over 160 repair claims, the average difference
between the appraisal award and the insurance offer varied greatly. The chart
below shows the range of how repair claims were undervalued.
$2,000 or Less
$2,000-$4,000
$4,000-$6,000
$6,000-$8,000
$8,000-$10,000
$10,000+
50
40
30
20
10
0
2017 2018 2019 2020 2021 2022
$8,000
$6,000
$4,000
$2,000
$0
Number of Claims
Average Amount
Undervalued
Year
Amount Undervalued
Our data shows that the average amount insurance companies undervalue repair
claims has varied in recent years, with an increase in the last 4 years.
Insurance
Company
Market Share in
Texas [Appendix C]
Average Amount
Undervalued
Count of Claims
Analyzed
Progressive
16.06%
$4,118.16
110
State Farm
13.86%
$4,382.82
128
GEICO
13.49%
$3,440.46
137
Allstate
10.57%
$3,809.46
136
USAA
6.85%
$3,547.33
77
Other
-
$3,910.24
492
Top 5 Insurers
Total
60.83%
$3,871.72
588
Southeast Texas
$3,957.88
(N=227)
Central Texas
$3,964.33
(N=130)
West Texas:
$4,143.04
(N=29)
HOW MUCH DO INSURANCE COMPANIES UNDERVALUE TOTAL
LOSS CLAIMS IN DIFFERENT REGIONS OF TEXAS ON AVERAGE?
HOW MUCH DO THE TOP INSURANCE COMPANIES IN TEXAS
UNDERVALUE TOTAL LOSS CLAIMS ON AVERAGE?
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 5
North Texas
$3,882.04
(N=389)
East Texas
$3,810.83
(N=209)
This graphic illustrates
the average difference
between the appraisal
award and the insurance
offer based on the
location of the
policyholder. N
represents the number of
claims analyzed. To see
which cities were
included in each region,
please visit Appendix B.
South Texas
$3,390.44
(N=83)
$2,000 or Less
$2,000-$4,000
$4,000-$6,000
$6,000-$8,000
$8,000-$10,000
$10,000+
600
400
200
0
2017 2018 2019 2020 2021 2022
$6,000
$4,000
$2,000
$0
HOW MANY PEOPLE RECEIVED LOWBALL OFFERS FOR THEIR
TOTAL LOSS AND BY HOW MUCH?
HOW MUCH HAS THE AVERAGE DIFFERENCE BETWEEN THE
APPRAISAL AWARD AND INSURANCE OFFER VARIED OVER THE
YEARS?
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 6
From the data we collected of over 1,000 total loss claims, the difference between
the appraisal award and the insurance offer varied greatly. The chart below shows
the range of how total loss claims were undervalued.
The average difference between the appraisal award and the insurance company's
offer has varied over the years, with an increase in the last 4 years.
Amount Undervalued
Average Amount
Undervalued
Year
Number of Claims
CONCLUSION
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 7
Fair auto appraisal gives consumers an essential tool if their insurance company
undervalues the cost of repairing the vehicle or the value of the total loss. This
report shows the average difference between the appraisal award and the insurance
offer from five appraisers working in Texas, touching the surface of the problem.
Our analysis quantifies the experience of over a thousand Texans, demonstrating
millions of dollars in undervalued claims. Each year, there are millions of crashes
causing property damage to vehicles in the United States. [5] From our data alone,
appraisal helped over 1,000 Texans recover over $5 million in property damages,
collectively. Scaled across millions of Texas drivers, one may safely assume the
problem of under indemnification is orders of magnitude larger.
Fair auto insurance appraisal helps consumers get their car repaired safely and
receive fair value as it increases the insurance payout by an average of $5,307.35
for repair claims and $3,889.27 for total loss claims. For the everyday Texan who
needs a safe car to go to work or take their kids to school, paying thousands of
dollars because the insurance company lowballed the offer to repair the vehicle is
devastating. If fair auto appraisal is not a mandatory right in policies, consumers will
be forced to pay out of pocket to have their vehicle repaired safely or corners will
be cut on repairs, resulting in unsafe vehicles on our Texas roads. (To read about
how a State Farm insured had to pay thousands of dollars out of pocket to repair his
vehicle, please visit texaswatch.org/we-need-fair-appraisal.)
We need all insurance policies in Texas to have fair appraisal as an option for
consumers. The Texas Department of Insurance lists appraisal on its website as a
way to resolve disputes with most auto insurance companies. [6] Additionally, we
need widespread education on the policyholders’ right to invoke the appraisal
clause. Texas Watch's Director of Organizing called dozens of consumers who
experienced an issue with their insurance company while getting their vehicle
repaired or assessing their total loss valuation. Only four people told her that the
insurance company educated them about their policy right to an appraisal. Thirty
four said their insurance company did not educate them about the appraisal
process. Consumers were often upset that their longtime insurer did not educate
them about the appraisal process to resolve their dispute.
In conclusion, we must make the right to a fair auto insurance appraisal mandatory
in Texas policies and educate policyholders about their right to invoke appraisal.
Without the right to a fair auto appraisal, consumers have few options when
determining the right dollar amount for the repair cost or the value of their total
loss. Fair appraisal leads to safe repairs, and safe repairs save lives!
SUPPORT HB 1437 BY CLARDY & SB 554 BY HUGHES!
Leg. advertising paid for by Ware Wendell, Executive Director, Texas Watch,
P.O. Box 42198, Austin, TX 78704.
To learn more, please visit saferepairs.org
APPENDIX A: METHODOLOGY
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 8
The insurance company's offer to repair vehicle or the insurance company's
value of the vehicle (without sales tax)
The appraisal award for the cost to repair or the value of the total loss (without
sales tax)
The city of the insured
The insurance company
The date of loss
The date of appraisal award or the date repairs were completed
The average difference between the appraisal award and the insurance offer
based on the geographical region (please see Appendix B for regions used).
The average difference between appraisal award and insurance offer based on
the insurance company. To calculate the top 5 insurance companies in Texas, we
added the percentages of market share for insurance companies with the same
name who appeared on the Top 40: Passenger Auto insurers from TDI's website.
Please see Appendix C for a revised list of top insurance companies in Texas. As
we have noted in this report, State Farm policies in Texas do not have the right
to invoke appraisal for repair claims. To calculate the average amount
undervalued for repair claims for the top 5 insurers in Texas, we only averaged
the amounts for Progressive, GEICO, Allstate, and USAA.
This report set out to understand, on average, how much does the insurance
company's offer to a policyholder differ from an appraisal award determined by
independent, third party appraisers? We requested data from body shops and
appraisers who work in Texas for all recent claims that had gone to appraisal. We
received data that included claims from 5 different appraisers. We received 15
repair claims from Appraiser A, 42 total loss claims from Appraiser A, 1 repair claim
from Appraiser B, 108 total loss claims from Appraiser B, 105 repair claims from
Appraiser C, 930 total loss claims from Appraiser C, 4 repair claims from body shop
A (these claims were handled by Appraiser D), and 41 repair claims from body shop
B (these claims were handled by Appraiser E). The data included the following:
The data set encompassed repair or total loss claims from 28 collision repair
facilities across Texas. We excluded the claims from our dataset that had
insufficient data.
After we received data from appraisers and body shops, we combined all data into
two spreadsheets: one for total loss and one for repairs. We calculated the
difference between the insurance offer and the appraisal award and the percent
change between the insurance offer and the appraisal award for each claim.
For all total loss claims and all repair claims, we found the average amount
undervalued, the average percent increase, and the sum of all the differences
between the insurance offer and the appraisal award.
We created the following pivot tables:
APPENDIX A: METHODOLOGY
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 9
The number of claims in which the difference between the appraisal award and
the insurance offer was: $2,000 or less; $2,000-$4,000; $4,000-$6,000;
$6,000-$8,000; $8,000-$10,000; or $10,000+.
The average difference between the appraisal award and the insurance offer
based on the year the loss occurred for both total loss claims and repair claims.
We rounded to the nearest dollar and cent where appropriate in presenting this
data.
A note regarding language used:
We propose that if the appraisal award is greater than the insurance offer, the
insurance company has undervalued the claim. In this report, we refer to the
"average amount undervalued," which is the average difference between the
appraisal award minus the insurance offer.
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 10
APPENDIX B: CITIES INCLUDED IN EACH REGION
Austin
Bastrop
Bertram
Boerne
Bryan
Bulverde
Burnet
Canyon Lake
Driftwood
Elgin
Fair Oaks Ranch
Gatesville
Georgetown
Harker Heights
Hewitt
Hutto
Jarrell
Kerrville
Kirbyville
Kyle
Leander
Liberty Hill
Lorena
Luling
Manchaca
Manor
Mart
New Braunfels
Paige
Pflugerville
Round Rock
Salado
San Marcos
Schertz
Spring Branch
Taylor
Temple
Waco
West
Wimberly
East Texas:
Arp
Arthur City
Athens
Atlanta
Beckville
Big Sandy
Blossom
Bullard
Como
Cooper
Cushing
Daingerfield
Detroit
Diboll
Emory
Flint
Gary
Gilmer
Gladewater
Grand Saline
Hawkins
Henderson
Holbrook
Honey Grove
Hugh Springs
Hughes Springs
Hunstville
Huntington
Huntsville
Jacksonville
Jefferson
Joinerville
Kaufman
Kemp
Kennard
Kilgore
Ladonia
Laneville
Lindale
Linden
Livingston
Long Branch
Longview
Lufkin
Mabank
Marshall
Mineola
Mount Enterprise
Mount Pleasant
Nacogdoches
New London
Newton
Omaha
Overton
Palestine
Panola
Paris
Pickton
Quitman
Roxton
Scroggins
Scurry
Shelbyville
Sheperd
Sulphur Springs
Sumner
Talco
Tatum
Terrell
Texarkana
Troup
Tyler
Van
Waskom
White Oak
Whitehouse
Winnsboro
Wortham
Zavalla
Central Texas:
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 11
APPENDIX B: CITIES INCLUDED IN EACH REGION
North Texas:
Allen
Argyle
Arlington
Aubrey
Bedford
Benbrook
Bowie
Burleson
Carrollton
Cedar Hill
Celina
Cleburne
Colleyville
Combine
Coppell
Corsicana
Dallas
Decatur
Denison
Denton
Desoto
Duncanville
Euless
Fairview
Farmersville
Flower Mound
Forestburg
Forney
Fort Worth
Frisco
Garland
Grand Prairie
Grapevine
Haltom City
Haslet
Heartland
Hurst
Irving
Italy
Justin
Keller
Krum
Lake Dallas
Lancaster
Lavon
Leonard
Lewisville
Little Elm
Mansfield
McKinney
Meridian
Mesquite
Midlothian
Murphy
Newark
Ovilla
Plano
Pottsboro
Prosper
Reno
Richardson
Roanoke
Rockwall
Rowlett
Royse City
Sachse
Sanger
Savannah
Seagoville
Seagoville
Sherman
Southlake
Sunnyvale
The Colony
Trophy Club
Venus
Waxahachie
White Settlement
Whitney
Wichita Falls
Wylie
South Texas:
Brownsville
Cibolo
Converse
Corpus Christi
Cotulla
Crystal City
Devine
Eagle Pass
Edinburg
Elmendorf
Harlingen
Helotes
Jourdanton
Laredo
Marion
McAllen
Mission
Pleasanton
Port Lavaca
Rio Grande City
San Antonio
Somerset
Uvalde
Victoria
Von Ormy
Windcrest
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 12
APPENDIX B: CITIES INCLUDED IN EACH REGION
Southeast Texas:
Dayton
Friendswood
Groves
Hampshire
Houston
Humble
Katy
Kingwood
La Porte
League City
Lumberton
Magnolia
Missouri City
Nederland
Needville
New Caney
Orange
Pearland
Pinehurst
Port Arthur
Port Neches
Richmond
Rosenberg
Rosharon
Seabrook
Spring
Sugar Land
Vidor
Village Mills
Waller
Willis
Winnie
West Texas:
Abilene
Aledo
Amarillo
Clyde
Comanche
Cross Plains
El Paso
Graham
Granbury
Hereford
Lubbock
San Angelo
Springtown
Stephenville
Weatherford
Bay City
Baytown
Beaumont
Brenham
Bridge City
Brookshire
Chappel Hill
Cleveland
Clute
Conroe
Cumberland
Cypress
*For repair claims displayed on page 3, we did not receive any repair claim data
from the Southeast region.
Insurance Company
Percentage of Market Share in Texas
Progressive
16.06
State Farm
13.86
GEICO
13.49
Allstate
10.57
USAA
6.85
Farmers
5.76
Liberty Mutual
4.47
Texas Farm Bureau
3.18
Consumers County Mutual
2.19
Home State
1.8
Auto Club
1.61
Garrison
1.57
Redpoint
1.44
Old American
1.25
Foremost
1.23
Infinity County Mutual
1.1
Loya
1.05
Colonial
1.03
American Access
0.97
Germania
0.9
Root
0.57
Alinsco
0.53
Amica
0.48
Dairyland
0.48
Esurance
0.38
Elephant
0.36
MGA
0.34
Unitrin
0.32
Mercury
0.29
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 13
APPENDIX C: REVISED LIST OF TOP PASSENGER AUTO INSURERS
Impact of Auto Appraisal, Mar. 2023 | Texas Watch | Page 14
APPENDIX C: REVISED LIST OF TOP PASSENGER AUTO INSURERS
We added the market shares of insurance companies that appeared on TDI's list of
Top 40: Passenger Auto insurers. For example, for the "USAA" entry, we added the
market share of United Services Automobile Association (USAA), USAA Casualty
Insurance Company, USAA General Indemnity Company, etc. For TDI's list of Top
40: Passenger Auto insurers in Texas, please visit
https://www.tdi.texas.gov/company/top40.html.
ENDNOTES
2022 Biennial Report, Texas Department of Insurance (December 2022):
https://www.tdi.texas.gov/reports/documents/biennial-report.pdf
Report to the 88th Legislature Recommendations Report, Office of Public
Insurance Counsel (January 2023): https://www.opic.texas.gov/wp-
content/uploads/2023/01/2023-OPIC-Recommendations-Report.pdf
Response to 2-4, 2-6, 2-23 Objections [SERFF Tracking Number SFMA-129506241],
National Association of Insurance Commissioners (September 2015):
https://filingaccess.serff.com/sfa/home/TX
Explanatory Memorandum [SERFF Tracking Number GECC-133271173], National
Association of Insurance Commissioners (July 2022):
https://filingaccess.serff.com/sfa/home/TX
Auto insurance statistics and facts, Bankrate (June 2022):
https://www.bankrate.com/insurance/car/auto-insurance-statistics/
Get help with an auto insurance complaint, Texas Department of Insurance
(November 2021): https://www.tdi.texas.gov/consumer/auto-insurance-
complaint.html
1.
2.
3.
4.
5.
6.
