The adjuster came out, wrote up the damage, and sent you a number. It’s not close to what your contractor told you it will actually cost to fix. Now what?
You don’t have to accept the first offer. Here’s what your options are.
Insurance adjusters aren’t necessarily acting in bad faith when they come in low. They’re working from a software tool — typically Xactimate — that generates repair estimates based on regional pricing databases. Those databases don’t always reflect actual contractor costs in your specific market, and they’re updated on a lag.
They also only scope what they can document. An adjuster who misses hidden water damage, doesn’t open walls, or underestimates the moisture extent will write a scope that’s genuinely incomplete — not fraudulent, just incomplete. The burden of documentation often falls on you.
Ask the insurance company for the full Xactimate estimate and line item breakdown. This shows exactly what they’re including and — more importantly — what they’re leaving out. Compare it to your contractor’s estimate line by line. You’re looking for items that are missing, quantities that are understated, or unit prices that are below local market rates.
This comparison is the basis of your dispute. “The estimate is too low” isn’t a useful argument. “You included 200 square feet of drywall replacement but our contractor documented 340 square feet of affected material with moisture meter readings” is a useful argument.
A professional restoration company generates a scope of work that mirrors the format insurance adjusters expect. Moisture meter readings at multiple points, photos of affected areas, a materials list, and labor estimates written in the same Xactimate format the insurer uses. When the restoration company’s scope disagrees with the adjuster’s scope, you have a documented basis for dispute rather than just a contractor’s verbal assessment.
This is why getting restoration documentation before cleanup matters. If the evidence is gone, the adjuster’s estimate is harder to challenge.
Texas Insurance Code Chapter 542 — the Prompt Payment of Claims Act — gives you specific legal protections. If your insurer unreasonably delays payment, underpays a valid claim, or misrepresents your policy coverage, you’re entitled to 18% annual interest on unpaid amounts plus attorney’s fees.
Texas also prohibits insurers from misrepresenting the terms of your policy, making false statements about your claim, or engaging in unfair settlement practices. These prohibitions are enforced by the Texas Department of Insurance. If you believe your insurer is acting in bad faith — not just being conservative, but actively misrepresenting your coverage — you can file a complaint with the TDI.
Most Texas homeowners policies include an appraisal clause. When you and your insurer can’t agree on the amount of damage, either party can invoke appraisal. Here’s how it works:
Appraisal is faster and cheaper than litigation. It doesn’t require a lawyer. And because the umpire’s decision is binding, it resolves the dispute definitively. Invoking appraisal is often the move that gets a lowball insurer to settle fairly before the process completes — because going through appraisal costs them too.
A public adjuster is a licensed professional who works for you — not the insurance company — to document your claim and negotiate a settlement. They’re expert in exactly the documentation, negotiation, and coverage interpretation that most homeowners aren’t.
Public adjusters in Texas typically charge 10–15% of the final claim settlement. On a $50,000 dispute, that’s $5,000–$7,500 — worth it if they recover significantly more than the insurer’s original offer. Not worth it if the gap is $2,000 on a small claim.
Verify licensing through the Texas Department of Insurance before hiring anyone who calls themselves a public adjuster.
If the insurer is genuinely acting in bad faith — denying a clearly valid claim, misrepresenting your coverage, refusing to communicate — an insurance attorney is appropriate. Many Texas insurance attorneys work on contingency for bad faith cases, meaning you don’t pay unless they recover.
The 18% interest penalty under Chapter 542 makes meritorious insurance cases attractive for contingency attorneys. If your claim is legitimate and the insurer is clearly in the wrong, the attorney’s interest is aligned with yours.
A low first offer is not a final answer. Get the line-item breakdown. Compare it to professional documentation. Request a re-inspection with your documentation in hand. If you still can’t reach an agreement, invoke appraisal or hire a public adjuster. You have rights under Texas law — use them.
If you need documentation to support your claim dispute, call 247 Restoration Specialists. We produce restoration scopes in the format adjusters understand and can provide moisture documentation that makes undercounting damage much harder to sustain.
Send a written demand to your insurer invoking the appraisal clause and naming your chosen appraiser. The demand should reference the appraisal provision in your policy by section number. Your insurer then names their appraiser within the time frame specified in your policy, and the two appraisers select an umpire. Check your policy for the specific procedures — they vary by insurer.
No. Texas Insurance Code prohibits retaliation against policyholders for exercising their rights. If you invoke appraisal, hire a public adjuster, or file a complaint with the Texas Department of Insurance, your insurer cannot retaliate by canceling your policy or raising your rates based on that action alone.
Xactimate is the industry-standard estimating software used by most insurance adjusters to calculate repair costs. It generates line-item estimates based on regional pricing databases. The database may not reflect current local contractor costs, which is one reason insurance estimates often come in lower than actual contractor bids. Restoration companies also use Xactimate, which allows for direct line-item comparison and dispute.
