Quick answer

If an insurance company in Alabama refuses to raise what it calls its “final” offer, you have several paths: continue negotiating, use any dispute-resolution steps in your policy (appraisal or arbitration), file a lawsuit for breach of contract (or for extra‑contractual recovery in some circumstances), or file a consumer complaint with the Alabama Department of Insurance. Which route makes sense depends on your policy language, the size of the claim, the evidence you have, and how strong your legal theory is.

Detailed answer — what can you do and how Alabama law affects your options

1. Read your policy for mandatory dispute procedures

Many property and some other insurance policies contain clauses that require appraisal, mediation, or arbitration before a court can decide value or coverage. If your policy has an appraisal clause, invoking it generally means both sides pick appraisers and an umpire to determine the loss amount. Appraisal typically resolves only value, not coverage or bad‑faith claims.

2. Send a clear demand and preserve evidence

Before filing suit, send a written demand letter that states the facts, your damages, and a deadline for a response. Keep all records: estimates, photos, repair bills, medical records, letters, email, phone logs, and the insurer’s communications. These items matter for negotiating, for appraisal/arbitration, and for litigation if you proceed.

3. Consider alternative dispute resolution

If your policy permits or the insurer agrees, you can ask for mediation or non‑binding arbitration. ADR can save time and expense compared with a lawsuit and sometimes encourages better settlement offers.

4. Breach of contract claim in court

If demand and ADR fail (and appraisal isn’t mandatory or doesn’t resolve everything), you may sue the insurer for breach of contract. In Alabama, contract claims are governed by the Code of Alabama and by case law. The timeline for suing depends on the type of claim — breach of written contract actions typically have a longer limitations period than tort claims — so act promptly. For general information on Alabama statutes and how to find specific sections of the Code of Alabama, see the Code of Alabama online: https://alisondb.legislature.state.al.us/.

5. Extra‑contractual (bad faith) claims and punitive damages

Alabama law recognizes extra‑contractual claims against insurers in certain circumstances. If an insurer denies or underpays a valid claim without a reasonable basis, or fails to investigate or evaluate the claim properly, an insured may be able to pursue additional damages beyond the contract amount. These claims are fact‑intensive. Courts will look at the insurer’s investigation, communications, justification for the offer, and whether the insurer followed the policy terms and Alabama law. Recovering punitive damages or other extra‑contractual relief can be difficult and requires strong proof.

6. File a consumer complaint with the Alabama Department of Insurance

You can also file a complaint with the Alabama Department of Insurance (the regulator). The Department cannot give you private legal advice but can investigate complaints about unfair claims handling and may help resolve disputes or identify regulatory violations. Alabama Department of Insurance: https://www.aldoi.gov/.

7. Smaller claims and small claims court

If the dollar amount is small, consider small claims court (unless the dispute resolution terms in your policy prevent that). Small claims procedures are faster and less expensive than full litigation, though remedies may be limited.

8. Timing and statute of limitations

Statutes of limitation limit how long you have to sue. Different causes of action (contract, negligence, or bad‑faith tort) may have different limitation periods under Alabama law. Because deadlines can be strict, do not delay consulting an attorney or filing a timely claim. For access to the Code of Alabama and to search specific limitations provisions, use the Code of Alabama online at the Alabama Legislature site: https://alisondb.legislature.state.al.us/.

9. When to hire an attorney

Hire a lawyer if: (a) the insurer’s final offer is substantially lower than your documented losses, (b) your claim involves coverage disputes or multiple potential claims, (c) the insurer’s conduct appears unreasonable or in bad faith, or (d) the amount at stake justifies litigation expense. An attorney can evaluate your policy, explain deadlines, send effective demand letters, handle appraisal/arbitration, or file suit if needed.

Typical outcomes when the insurer refuses to increase its final offer

• You accept the offer and the claim ends.
• You negotiate further and reach a compromise higher than the offer.
• You invoke appraisal or arbitration (if available) and obtain a different valuation.
• You file suit for breach of contract (and possibly extra‑contractual relief). A court outcome can award the contract amount, attorney fees (in limited circumstances), and in rare cases extra‑contractual damages.
• You file a complaint with the Alabama Department of Insurance; the Department may mediate or investigate regulatory violations but cannot guarantee a particular settlement amount.

Helpful Hints

• Check your policy immediately for appraisal, arbitration, or time‑limit clauses.
• Document everything: photos, receipts, estimates, medical records, and all communications with the insurer.
• Send a written demand with a reasonable deadline before suing.
• Consider appraisal if the dispute is about value only; appraisal rarely resolves coverage disputes.
• File a complaint with the Alabama Department of Insurance if you suspect unfair claim practices: https://www.aldoi.gov/.
• If you sue, be mindful of Alabama statute of limitations rules and start the process promptly.
• Ask an attorney to evaluate whether you have a strong bad‑faith or extra‑contractual claim—these claims require careful factual proof.