Detailed Answer — how to respond under Michigan law

If an insurance company refuses to increase what it calls a final offer, you still have practical and legal options. The path you take depends on the type of policy (auto, homeowners, commercial, etc.), the policy language (including any appraisal clause), the size of your loss, and whether the insurer’s conduct may violate state law on unfair claim practices.

1. Confirm the offer is truly “final” and collect documentation

Ask the adjuster in writing to confirm the offer and the basis for the amount. Keep a clear file with:

• the insurer’s written offer and any demand you made;
• photos, repair estimates, invoices, police reports, or contractor bids;
• all letters, emails, and notes of phone calls (date, time, who you spoke with, summary).

2. Check your policy for an appraisal or dispute resolution clause

Many property, homeowners, and commercial policies include an appraisal clause that lets the insured and insurer each pick an appraiser and, if they disagree, have an umpire decide the value. If your policy contains an appraisal procedure, it is often faster and cheaper than litigation and can produce a binding resolution of the amount in dispute.

3. Try structured negotiations or mediation

If appraisal is not available or appropriate, propose mediation or another alternative dispute resolution method. Mediators can help find middle ground without court. Requesting mediation does not waive your legal rights but check timing deadlines in your policy and state law.

4. File an administrative complaint with Michigan’s insurance regulator

If you think the insurer acted unfairly, you can file a complaint with the Michigan Department of Insurance and Financial Services (DIFS). DIFS reviews complaints, may contact the company, and can identify regulatory problems. DIFS complaints do not create private damages but can pressure the company to re-evaluate the claim.

File a complaint: Michigan DIFS — file an insurance complaint.

5. Consider a lawsuit for breach of contract or insurer misconduct

If negotiations fail, you may bring a court action. Typical claims include breach of contract (for failing to pay the policy benefit) and, in some situations, claims for unfair settlement practices or bad faith. Michigan law prohibits unfair or deceptive acts by insurers; for example, the Insurance Code lists prohibited claim settlement practices (MCL 500.2006).

Remedies in court can include a money judgment for the covered loss and, depending on the claim, interest, and potentially attorney fees or other damages. The exact remedies depend on the claim theory, policy language, and court decisions.

6. Use small-claims court when amounts are limited

For smaller disputes, Michigan’s small claims courts (typically up to $6,500 or the local limit) offer a faster, lower-cost option where you can represent yourself. Check local court rules and deadlines before filing.

7. Consult a Michigan attorney early

An attorney can: review your policy and the insurer’s position, advise whether appraisal or litigation is best, prepare a demand letter that may unlock additional settlement value, and calculate potential remedies. Time limits—policy notice requirements and statute of limitations—can bar claims if you wait too long.

Legal framework to know

• MCL 500.2006 — lists unfair claim settlement practices and the insurer duties you can cite in complaints or litigation: MCL 500.2006.
• Michigan DIFS handles consumer complaints and can provide guidance: Michigan DIFS.

Because statutes and court decisions change, a local attorney can confirm current law that applies to your claim.

Helpful Hints — practical steps you can take right away

• Request the insurer’s final offer in writing and ask for the claim file or explanation of how they calculated the amount.
• Get at least two independent repair or replacement estimates and submit them to the insurer promptly.
• If your policy has an appraisal clause, read it closely and consider invoking it if appropriate.
• Send a clear demand letter summarizing your documentation and the remedy you seek; send it by certified mail so you have proof of delivery.
• File an online complaint with Michigan DIFS to create an official record of the dispute: https://www.michigan.gov/difs/consumer/insurance/file-a-complaint.
• Preserve all receipts, photos, and correspondence. Courts and mediators rely heavily on paper trails.
• If the amount in dispute is small, research small-claims procedures for your county court — this can save time and legal fees.
• Consult a Michigan attorney before filing suit to confirm deadlines and potential recovery (including possible fees and interest).