In a ruling issued today from Iowa, the court enforced an appraisal award issued in favor of homeowners Gregory and Karen Larson, who suffered hailstorm damage to their property in March 2023. The case, Larson v. Auto-Owners Insurance Company, 1 offers an important reminder that the appraisal process and awards are not easily overcome based on dissatisfaction with the outcome.
The dispute arose when the Larsons and their insurer disagreed over the scope and valuation of the hail damage. A central point of contention involved whether undamaged siding should be replaced to maintain a reasonably uniform appearance, a requirement under Iowa law. Pursuant to their policy, the Larsons invoked the appraisal provision to determine the amount of their loss. Each party selected an appraiser, and the two appraisers agreed upon an umpire, Lee Shepherd, to resolve any disputes.
The appraisal proceeded according to plan until the appraisers could not reach an agreement, at which point the umpire took over. Shepherd conducted an independent inspection after both appraisers agreed not to be present and ultimately issued an appraisal award in the amount of $208,194.47. This figure matched the amount proposed by the Larsons’ appraiser and exceeded the amount listed in the Larsons’ original sworn proof of loss by over $80,000. The Larsons’ appraiser signed the award. Auto-Owners’ appraiser refused to sign, criticizing the umpire’s process.
Auto-Owners responded by filing a motion to set aside the umpire’s award, claiming mistake, bias, and misfeasance. The company contended that the umpire failed to hold discussions with either appraiser, did not facilitate deliberations, and essentially adopted the policyholders’ appraiser’s position wholesale. They argued that this lack of interaction and the fact that the award exceeded the proof of loss indicated that the process was not impartial or fair. According to Auto-Owners, the award should be vacated and the matter returned to court.
The Larsons, represented by Merlin Law Group attorney Jonathan Bukowski, opposed the motion and filed their own motion to enforce the award. They argued that the process complied with both the insurance policy and Iowa law. The policy does not require the umpire to deliberate with appraisers or hold joint inspections, and Iowa courts have long held that appraisers and umpires are selected for their expertise and permitted to reach their own independent conclusions.
The Larsons pointed out that the umpire had received detailed estimates from both sides, reviewed them, and made his own site inspection before reaching a decision. That the umpire’s conclusions mirrored those of the policyholders’ appraiser did not, in their view, indicate bias, only agreement on the facts and necessary scope of repairs. Furthermore, the amount in the proof of loss does not restrict the appraisal panel, whose function is to establish the actual amount of the covered loss.
The court agreed with the Larsons. In its ruling, it reiterated the high threshold required under Iowa law to overturn an appraisal award. Iowa requires clear evidence of fraud, mistake, or misfeasance. The court found no such evidence. While acknowledging that the umpire’s process was less communicative than Auto-Owners would have liked, the court emphasized that neither the policy nor Iowa law required discussion, consensus-building, or adherence to the proof of loss figure.
The umpire’s actions fell squarely within the procedural and legal boundaries for a valid appraisal. The court noted that private resolutions of disputes, such as appraisals, are strongly favored for their speed and cost-efficiency. Accordingly, the court denied Auto-Owners’ motion, lifted the stay on the lawsuit, and enforced the appraisal award in full.
This decision highlights how courts will often protect the finality and integrity of the appraisal process. Dissatisfaction with the result is not enough to undo an award, especially when the challenging party cannot demonstrate concrete wrongdoing. This case serves as a reminder to policyholders and insurers alike that appraisal decisions, once rendered under the agreed terms, carry significant weight and will not be easily disturbed.
Thought For The Day
“I do not always agree with what the Court says or does, but I respect its role in our democracy.”
—Lyndon B. Johnson
1 Larson v. Auto-Owners Ins. Co., No. LACV053659 (Iowa Dist. Ct. June 4, 2025).
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