The bill would limit the appraisal process used in disputed claims to determining only the cost of property damage. Appraisers would be unable to determine the cause of the damage.
Critics argued that this would force more Iowans to go to court to resolve their claims rather than using the appraisal process, which is typically faster and less expensive.
The measure, House File 2299, was unanimously passed by the Iowa House in late February, but it was met with fierce opposition from insurance adjusters and Iowa homeowners at a subcommittee meeting Monday, and the meeting's chair said it might not advance.
"My intention is that we either have an amendment and hold a second subcommittee by Monday, or this is going to be dead for this session," said Sen. Zach Nunn, R-Bondurant.
"At this point, I don't see enough information to proceed," he added.
A 2018 Iowa Supreme Court case, according to Brittany Lumley, a lobbyist for the Iowa Insurance Institute, expanded the appraiser's role. She stated that the bill would return Iowa's law to its previous state.
"The process will remain the same," she assured the subcommittee. "It's just ensuring that the appraisers focus on the loss and the cost of the damage rather than the coverage causation disputes."
However, Tim Johnson, a Cedar Rapids lawyer who handled the case, stated that the Supreme Court upheld current law and instructed lawmakers not to pass the bill. He stated that it would be beneficial to his company but detrimental to Iowans who might be drawn into more costly litigation over their insurance claims.
"This bill would bring in a lot of money for me. This bill is beneficial to me as a lawyer because everything will be litigated "He stated. "And here's what I know: the citizens of Iowa cannot afford not to have a low-cost resolution process that resolves these claims without the need for someone like me. I shouldn't be needed very often."
The Senate Commerce Committee's chairman, Sen. Jason Schultz, R-Schleswig, believes the 2018 case tipped the scales too far in favor of insurance adjusters.
"All of a sudden, I see a new industry sprouting up as public adjusters try to take another bite at the apple," he explained. "And it will result in higher insurance premiums."
The bill's discussion frequently returned to the tornadoes that swept through Iowa over the weekend. Six people were killed in Winterset, and one was killed near Chariton.
"We had horrific disasters across our state, including in my community, over the weekend. I believe we spent the majority of Sunday cleaning up tornado debris that had ravaged communities "Nunn is running for Congress in Iowa's 3rd Congressional District.
The bill was opposed by Sen. Herman Quirmbach, D-Ames. He stated that the current system is fair and efficient, and that "if it ain't broke, don't fix it."
"Trying to recover from all of those damages is a significant burden for anyone, not just the individual homeowner. For the business community, and for the entire community, "He stated. "Having to fight your way through court in order to get a decent settlement, which you know could take years, does not seem to me to be in the best interests of the general public or insured customers."