Detailed Answer — How to challenge a low insurance settlement offer in Minnesota
This guide explains, in plain language, the typical steps available when an insurance company offers a settlement you believe is too low after an accident in Minnesota. This is educational information, not legal advice. If you need legal advice about your specific situation, consult a licensed Minnesota attorney.
1. Identify the type of claim (first‑party vs. third‑party)
First, determine whether you are pursuing a claim under your own policy (first‑party) or seeking money from another driver’s insurer (third‑party). The process you follow and the rules that apply may differ depending on the claim type. For example, your own insurer may owe you obligations under your policy (like property damage or personal injury protection), while a third‑party carrier is defending liability for the accident.
2. Read your policy and note any dispute clauses
Carefully review your insurance policy’s sections on claims, appraisal, and dispute resolution. Some policies include appraisal or arbitration clauses for property damage that can provide a binding or nonbinding process to resolve the value of loss. Understanding your policy terms tells you what options you already have contractually.
3. Gather and preserve evidence
Document everything: police reports, photos of vehicles and scene, medical records and bills, wage loss documentation, receipts for expenses, rental car and repair invoices, and written communication with the insurer. Preserve phone records, text messages, and emails from the insurer. Strong documentation strengthens your negotiating position and any later claim.
4. Send a detailed demand letter
If you have not already, prepare and send a written demand package to the insurer. A demand typically includes a clear statement of facts, the legal basis for the claim (briefly), itemized damages, medical records, bills, and a specific monetary demand with a deadline for response. A thorough demand often prompts a better offer before more formal steps are needed.
5. Use the insurer’s internal appeal process
Many insurers have an internal appeal or review procedure. Ask for the name and title of the adjuster supervising your file, request that the claim be reassigned or reviewed by a supervisor, and put your dispute in writing. Ask the insurer to explain the basis for its valuation in detail—how it calculated injury damages or repair costs, and what it relied on regarding liability.
6. Consider alternative dispute resolution (mediation, appraisal, arbitration)
If negotiation stalls, alternative dispute resolution (ADR) can be faster and cheaper than litigation:
- Appraisal: Often used for property damage. Each side selects an appraiser; if the appraisers disagree they select an umpire and the decision typically resolves the amount of loss (check whether it’s binding under your policy).
- Mediation: A neutral mediator helps parties reach a settlement. It’s voluntary but commonly used and often required by courts or insurers before trial.
- Arbitration: A binding decision by a neutral arbitrator may be available if the policy allows or if both parties agree.
Check your policy and the other insurer’s willingness to use ADR. Mediation can be especially effective in personal injury disputes.
7. File a complaint with the Minnesota Department of Commerce
If you believe the insurer engaged in unfair practices, you may file a complaint with the Minnesota Department of Commerce. The Department can investigate unfair claim settlement practices and sometimes help resolve disputes. File online or by phone through the Department’s consumer insurance complaint page: https://mn.gov/commerce/consumers/complaints/insurance-complaints/
8. Consider filing a lawsuit
If negotiation, ADR, and administrative complaints do not result in a fair outcome, your next option may be to file a civil lawsuit against the at‑fault driver (third‑party) or, in limited circumstances, against the insurer (for breach of contract or bad faith). Filing suit starts formal litigation and can lead to discovery, depositions, motions, and trial. Litigation can produce a larger recovery but also involves time, cost, and risk.
Before suing, confirm applicable procedural requirements and timing. Minnesota law sets deadlines (statutes of limitations) for filing claims. For details and to find the specific statute that applies to your case, consult the Minnesota Statutes search: https://www.revisor.mn.gov/statutes/. Also review court resources on filing a civil case at the Minnesota Judicial Branch: https://www.mncourts.gov/.
9. When to hire an attorney
Consider hiring a Minnesota personal injury or insurance attorney if:
- The insurer’s offer is well below reasonable value of your claim;
- Serious injuries, permanent impairment, or significant wage loss are involved;
- Liability is disputed or there are complex medical issues;
- The claim involves multiple insurers, subrogation, or complicated policy language;
- You are unsure how to preserve evidence, meet procedural deadlines, or calculate damages.
Many personal injury attorneys work on contingency (they get paid only if you recover). A lawyer can evaluate your claim, negotiate, file suit if needed, and explain potential fees and costs.
10. Practical timeline and next steps
- Immediately preserve evidence and obtain medical care.
- Request a copy of your insurance policy and any reservation of rights letters from the insurer.
- Send a detailed demand and set a reasonable deadline for response.
- If the insurer refuses to increase its offer, request mediation or appraisal where appropriate.
- File a complaint with the Minnesota Department of Commerce if you suspect bad faith or unfair practices.
- Consult an attorney before the state filing deadline to evaluate lawsuit options.
Key Minnesota resources
- Minnesota Department of Commerce — insurance complaints and consumer help: https://mn.gov/commerce/consumers/complaints/insurance-complaints/
- Minnesota statutes (searchable): https://www.revisor.mn.gov/statutes/
- Minnesota Judicial Branch (court procedures, small claims, filing a lawsuit): https://www.mncourts.gov/
Each case is unique. Use these steps to structure your response to a low offer, and consult a Minnesota attorney to get advice tailored to your facts.
Disclaimer: This article is for general informational purposes only and is not legal advice. It does not create an attorney‑client relationship. For legal advice about your specific case, contact a licensed attorney in Minnesota.
Helpful Hints
- Keep a written claim timeline: date of accident, medical visits, all contacts with insurers, and any offers in writing.
- Get a fair repair estimate from an independent, reputable shop if the insurer’s property estimate seems low.
- Obtain copies of all medical records and itemized bills to show the insurer the link between treatment and the accident.
- Don’t accept the first offer automatically; insurers often start lower than they expect to pay.
- Ask the insurer to explain in writing the reasons for a low offer—this can reveal weaknesses in their position you can address.
- If you hire an attorney, give the lawyer as much documentation as possible to speed negotiations or litigation.
- Be mindful of deadlines—administrative and court deadlines can bar recovery if missed.
- Use mediation or appraisal early if appropriate; they are typically faster and less expensive than trial.