When an insurer will not raise its final offer: clear steps under Texas law

Short answer: You do not have to accept a low final offer, but your options depend on the type of claim, your policy language, the size of the claim, and applicable Texas deadlines. Options include further negotiation, invoking an appraisal clause (for many property claims), filing a regulatory complaint with the Texas Department of Insurance, or filing a lawsuit (contract, statutory claims under the Texas Insurance Code, or pursuing the underlying tort claim). Each option has costs, time limits, and legal consequences.

Detailed answer — what happens next and legal paths you can take

First, identify what kind of claim this is (first‑party property claim, first‑party health/benefits claim, or third‑party liability claim). That affects the remedies available.

1) Review your policy and the insurer’s last written offer

• Check for an appraisal or dispute resolution clause. Many homeowner and commercial property policies include an appraisal process for disagreements about the amount of loss. If your policy has appraisal, invoking it can force an independent appraisal panel to determine value and may yield a higher award.
• Note any deadlines the policy imposes (notice requirements, proof of loss deadlines) and statutory deadlines for filing suit. Preserve all correspondence, estimates, photos, and receipts.

2) Try further negotiation and use leverage

• Send a written demand letter summarizing damages, attaching evidence, and stating a clear dollar demand and deadline. A focused, well-documented demand sometimes prompts reconsideration.
• Ask for an explanation of coverage decisions in writing, and demand full policy citations for any coverage denials so you can evaluate them.

3) Use appraisal (for many property claims)

If your property policy contains an appraisal clause and the dispute is truly about the amount of loss (not coverage), you can invoke that clause. Appraisal typically selects two appraisers and an umpire to set the value. Appraisal can be faster and cheaper than litigation but generally cannot decide coverage disputes.

4) File a complaint with the Texas Department of Insurance (TDI)

If the insurer’s conduct looks unfair or you suspect it violated Texas insurance law—slow handling, failure to reasonably investigate, or refusal to communicate—you can file a complaint with TDI. TDI will review and may intervene or discipline an insurer. See TDI’s consumer complaint information: https://www.tdi.texas.gov/consumer/complain/index.html

5) Consider mediation or alternative dispute resolution

Mediation or arbitration (if agreed) can be a faster, lower‑cost alternative to full litigation. Courts often encourage mediation, and many insurers will agree to mediate before trial.

6) Bring a lawsuit — contract, Texas Insurance Code claims, or the underlying tort claim

• First‑party claim (you vs. your insurer): You can sue for breach of contract (policy), and you may also assert statutory claims under the Texas Insurance Code for unfair or deceptive acts and for failure to promptly pay claims. See Texas Insurance Code, Chapters 541 and 542: https://statutes.capitol.texas.gov/Docs/IN/htm/IN.541.htm and https://statutes.capitol.texas.gov/Docs/IN/htm/IN.542.htm
• Third‑party liability claim (you as injured party vs. the at‑fault person): If the insurer for the at‑fault driver/party refuses to increase its settlement offer, you can reject it and sue the at‑fault party. You sue the insured tortfeasor in court for damages rather than suing the liability insurer directly, although bad faith and unfair practices claims can sometimes be asserted against liability insurers under the Insurance Code.
• Damages and remedies vary: contract damages, interest, statutory penalties, and—if applicable—attorney’s fees. Chapter 542 contains provisions for penalties, interest and attorney fees for violations of prompt payment requirements. See Chapter 542: https://statutes.capitol.texas.gov/Docs/IN/htm/IN.542.htm
• Watch deadlines. Common deadlines in Texas include a two‑year statute of limitations for many personal injury claims and a four‑year statute for many breach of contract claims. See Texas Civil Practice & Remedies Code, Chapter 16: https://statutes.capitol.texas.gov/Docs/CP/htm/CP.16.htm

7) Practical realities and likely outcomes

• Insurers sometimes make a final offer to pressure settlement. If evidence strongly supports a higher amount, the insurer may still increase its offer if faced with a credible threat of appraisal, regulatory complaint, or lawsuit. But litigation takes time and money.
• If the difference between the insurer’s offer and your demand is small, settling may be pragmatic. If the gap is large, litigation or appraisal may be worth pursuing.
• Even if you win at trial, recovery of full damages is not guaranteed. Consider settlement cost, time, stress, and the likelihood of increased recovery before filing suit.

How to pick the right next step — checklist

1. Read your policy immediately for appraisal, suit limitation, and notice provisions.
2. Collect and organize evidence: photos, repair estimates, bills, and medical records.
3. Send a clear written demand with supporting documents and a short deadline for response (e.g., 10–14 days).
4. If property damage and appraisal applies, consider invoking appraisal.
5. File a complaint with the Texas Department of Insurance if the insurer’s conduct appears unfair: https://www.tdi.texas.gov/consumer/complain/index.html
6. Talk to an attorney about the value of filing suit, possible statutory claims under the Texas Insurance Code, and the applicable statutes of limitation: https://statutes.capitol.texas.gov/Docs/IN/htm/IN.541.htm and https://statutes.capitol.texas.gov/Docs/IN/htm/IN.542.htm

Helpful hints

• Keep everything written. Ask for decisions and explanations in writing; they help a future demand, appraisal, or lawsuit.
• Don’t miss deadlines. If you wait past the applicable statute of limitations or policy notice deadline, you may lose legal rights. See Texas statutes on limitations: https://statutes.capitol.texas.gov/Docs/CP/htm/CP.16.htm
• Be specific in your demands. Attach itemized estimates and receipts. A clear, documented demand is more persuasive to adjusters and mediators.
• Consider cost‑benefit. Litigation is useful when the likely recovery exceeds costs and time involved. For small dollar disputes, appraisal or small claims court may be better.
• Ask about fee arrangements. Many attorneys handle insurance disputes on contingency; others charge hourly. If statutory fee shifting is available (e.g., under certain Insurance Code claims), fees can sometimes be recovered from the insurer.
• Use TDI resources. The Texas Department of Insurance offers consumer guides about claims handling and appraisal. Visit: https://www.tdi.texas.gov/consumer/claims/index.html

Disclaimer: This article is for general informational purposes only and is not legal advice. It does not create an attorney‑client relationship. For advice tailored to your situation, consult a licensed Texas attorney who handles insurance disputes.