Recent legal changes affect how Texas policyholders resolve property damage disputes. Residential owners, HOAs and commercial groups must account for two factors: recent high court rulings regarding legal fees and new state requirements for the appraisal process. Both impact your ability to recover costs.
Can you recover attorney fees after an appraisal award in Texas?
Recent judicial decisions have narrowed the path to recovering attorney fees. The state’s high court has held that an insurer can often avoid paying your legal fees if they pay the full appraisal award and required interest within the timeframe allowed by law. This payment can effectively stop a lawsuit specifically aimed at recovering those fees.
Texas law uses a specific formula to set attorney fees in property damage cases. If an insurer pays the award before a court enters a final judgment, the calculation often results in zero fees. The carrier might not pay your legal costs, even if they originally underpaid your claim. You might still recover fees if the insurer fails to pay required interest or if you have other valid legal claims.
How do new requirements change mandatory appraisal?
New state requirements took effect on January 1, 2026. This law requires a binding appraisal for most residential property and auto disputes. While commercial policies often have appraisal rules in their contracts, these recent changes make this a legal requirement for the residential sector.
These new mandates generally do not apply to commercial policies. The law indicates that Texas is shifting toward appraisal as the primary method to settle disputes over the amount of loss. Residential managers and boards must move quickly, as these rules govern how you must resolve valuation disagreements.
What is the penalty interest rate for 2026?
Texas law encourages carriers to pay on time through penalty interest. For weather-related claims, the 2026 penalty rate is determined by adding 5% to the current prime rate.
State regulators set this rate between 5% and 15% depending on economic conditions. Other types of claims, such as fire or theft, may carry a higher yearly penalty. While these penalties address delays, they might not cover all lawsuit costs, especially for large commercial buildings.
Protect your rights
Review your required presuit notice with a lawyer before starting an appraisal or answering a carrier’s demand. Providing the correct notice in the correct format is necessary to maintain your right to seek attorney fees and interest.