The insurer’s challenge to an appraisal award that was more than the insureds’ proof of loss was rejected by the court. Larson, et al. v. Auto-Owners Ins. Co., Iowa Dist. Ct. No. LACV053659 (Iowa Dist. Ct. June 4, 2025).
The insureds’ home was damaged by hail. The insureds and Auto-Owners disagreed over the loss amount, primarily related to replacement of undamaged siding and the requirement of reasonably uniform appearance. The insureds invoked the policy’s appraisal provision.
The umpire determined the final appraisal award was $208,194.47. The award was $80,000 higher than the insureds’ proof of loss.
Auto-Owners sought to set aside the umpire’s award on the basis of mistake, bias or misfeasance. Auto-Owners alleged the process was unfair and partial, largely due to the umpire’s lack of communication and deliberation with either party’s appraiser. The umpire merely adopted the insureds’ appraisal.
Under Iowa law, an appraisal award could not be set aside unless the complaining party showed fraud, mistake or misfeasance on the part of an appraiser or umpire. Here, the umpire received appraisals from each party, scheduled his own appraisal outside the presence of both parties’ appraisers, and then agreed with the insureds’ appraisal. This was consistent with the policy terms,
The fact that the umpire’s appraisal exceeded the original proof of loss did to invalidate the award. Nor was the lack of communication with the parties’ respective appraisers. The allegations by Auto-Owners did not meet the high burden of invalidating the award based on fraud, mistake or misfeasance