In a ruling issued right now from Iowa, the court docket enforced an appraisal award issued in favor of house owners Gregory and Karen Larson, who suffered hailstorm harm to their property in March 2023. The case, Larson v. Auto-Homeowners Insurance coverage Firm, 1 provides an vital reminder that the appraisal course of and awards are usually not simply overcome based mostly on dissatisfaction with the result.
The dispute arose when the Larsons and their insurer disagreed over the scope and valuation of the hail harm. A central level of competition concerned whether or not undamaged siding must be changed to keep up a fairly uniform look, a requirement underneath Iowa legislation. Pursuant to their coverage, the Larsons invoked the appraisal provision to find out the quantity of their loss. Every social gathering chosen an appraiser, and the 2 appraisers agreed upon an umpire, Lee Shepherd, to resolve any disputes.
The appraisal proceeded in accordance with plan till the appraisers couldn’t attain an settlement, at which level the umpire took over. Shepherd carried out an unbiased inspection after each appraisers agreed to not be current and finally issued an appraisal award within the quantity of $208,194.47. This determine matched the quantity proposed by the Larsons’ appraiser and exceeded the quantity listed within the Larsons’ authentic sworn proof of loss by over $80,000. The Larsons’ appraiser signed the award. Auto-Homeowners’ appraiser refused to signal, criticizing the umpire’s course of.
Auto-Homeowners responded by submitting a movement to put aside the umpire’s award, claiming mistake, bias, and misfeasance. The corporate contended that the umpire failed to carry discussions with both appraiser, didn’t facilitate deliberations, and primarily adopted the policyholders’ appraiser’s place wholesale. They argued that this lack of interplay and the truth that the award exceeded the proof of loss indicated that the method was not neutral or truthful. In line with Auto-Homeowners, the award must be vacated and the matter returned to court docket.
The Larsons, represented by Merlin Regulation Group lawyer Jonathan Bukowskiopposed the movement and filed their very own movement to implement the award. They argued that the method complied with each the insurance coverage coverage and Iowa legislation. The coverage doesn’t require the umpire to deliberate with appraisers or maintain joint inspections, and Iowa courts have lengthy held that appraisers and umpires are chosen for his or her experience and permitted to succeed in their very own unbiased conclusions.
The Larsons identified that the umpire had obtained detailed estimates from either side, reviewed them, and made his personal website inspection earlier than reaching a call. That the umpire’s conclusions mirrored these of the policyholders’ appraiser didn’t, of their view, point out bias, solely settlement on the information and needed scope of repairs. Moreover, the quantity within the proof of loss doesn’t prohibit the appraisal panel, whose operate is to determine the precise quantity of the coated loss.
The court docket agreed with the Larsons. In its ruling, it reiterated the excessive threshold required underneath Iowa legislation to overturn an appraisal award. Iowa requires clear proof of fraud, mistake, or misfeasance. The court docket discovered no such proof. Whereas acknowledging that the umpire’s course of was much less communicative than Auto-Homeowners would have favored, the court docket emphasised that neither the coverage nor Iowa legislation required dialogue, consensus-building, or adherence to the proof of loss determine.
The umpire’s actions fell squarely throughout the procedural and authorized boundaries for a legitimate appraisal. The court docket famous that non-public resolutions of disputes, akin to value determinations, are strongly favored for his or her pace and cost-efficiency. Accordingly, the court docket denied Auto-Homeowners’ movement, lifted the keep on the lawsuit, and enforced the appraisal award in full.
This resolution highlights how courts will typically shield the finality and integrity of the appraisal course of. Dissatisfaction with the consequence isn’t sufficient to undo an award, particularly when the difficult social gathering can not display concrete wrongdoing. This case serves as a reminder to policyholders and insurers alike that appraisal choices, as soon as rendered underneath the agreed phrases, carry vital weight and won’t be simply disturbed.
Thought For The Day
“I don’t at all times agree with what the Courtroom says or does, however I respect its function in our democracy.”
—Lyndon B. Johnson
1 Larson v. Auto-Homeowners Ins. Co.No. LACV053659 (Iowa Dist. Ct. June 4, 2025).
