June 8, 2023


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Iowa Supreme Court sides with insurance company in Oelwein restaurant’s fire claim | Crime and Courts


Luigi’s Restaurant and Lounge in Oelwein was destroyed in a November 2016 fire.

OELWEIN – The Iowa Supreme Court has ruled against an Oelwein restaurant that was destroyed in a fire in a dispute with its insurance company.

A kitchen fire gutted Luigi’s Restaurant and Lounge on Frederick Avenue in November 2016, resulting in a total loss.

The business was insured by United Fire and Casualty, and an initial appraisal estimated the building had been valued at $242,000, based on the market value of similar properties.

But Luigi’s owner rejected the estimate and sought a second opinion. The second review, conducted by another party, came up with a $1.03 million estimate for building and fixtures based on the cost to replace, according to court records.

An Oelwein landmark is no more following a Saturday, Nov. 12, 2016, fire. The iconic Luigi’s Restaurant and Lounge, 1020 S. Frederick Ave., was destroyed by a blaze that apparently started in the kitchen. The blaze began around 3:15 p.m. while the business was open, and the flames continued to burn into the night with authorities finally tearing down the walls as the fire raged on.

Jeff Reinitz

A hearing between the two appraisers came up with a $502,000 loss, which was just under the $550,000 loss limit on the insurance policy.

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Luigi’s took United Fire to court alleging the insurance company lowballed its offer. A jury awarded the restaurant $48,000 in actual damages for the difference between the appraisal and the policy limit. Jurors also awarded $41,000 in a bad-faith claim for expenses Luigi’s incurred and another $30,000 in punitive damages.

Live, raw video from Luigi’s Restaurant fire in Oelwein. Nov. 12, 2016. Originally posted on Periscope.

Jeff Reinitz

United Fire appealed the verdict, and in a ruling handed down Friday, the Iowa Supreme Court sided with the insurance company.