What Happens If an Insurance Company Refuses to Increase Their Final Offer?

Purpose: This FAQ explains your options under Connecticut law if an insurer refuses to raise a final settlement offer. It explains practical next steps, administrative remedies, and when you should consider legal action. This is educational only and not legal advice.

Short answer

If an insurer refuses to increase its final offer in Connecticut, you have several options: negotiate further, use contract remedies (appraisal or dispute-resolution clauses), file an administrative complaint with the Connecticut Insurance Department, bring a lawsuit (including a bad faith claim in limited circumstances), or pursue a claim in small-claims court if the amount fits that forum. Which path makes sense depends on your policy terms, the size and strength of your claim, any deadlines in the policy or law, and the evidence you have.

Detailed answer — step-by-step guide

1. Confirm the insurer’s “final” offer and the consequences of accepting it

Before doing anything, get the insurer’s offer in writing and check whether accepting it requires you to sign a release. A signed release typically ends your right to pursue additional recovery for the same loss, so do not sign a release until you are sure the offer covers everything you are entitled to and you have reviewed supporting documents. If you accept by cashing a check with a release attached, courts often treat that as settlement.

2. Review your policy for dispute-resolution clauses

Many policies include an appraisal clause for property claims or an arbitration clause. Appraisal is a contract process where each side picks an appraiser and a neutral umpire resolves valuation disputes. Arbitration can require you to resolve disagreements outside court. These processes can be faster and less costly than litigation but may limit remedies (for example, appraisal typically addresses value, not coverage or bad faith).

3. Gather and document evidence

Make a clear file: policy, all claim correspondence, estimates, repair invoices, photographs, medical records (if personal injury), and notes of phone calls (date, time, who you spoke with, what was said). Strong documentation strengthens your negotiating position and any later complaint or lawsuit.

4. Try further negotiation or demand letter

Send a written demand that summarizes your damages, cites supporting documents, and sets a reasonable deadline to respond. Sometimes a clear, well-documented demand prompts a new offer. If the insurer cites a specific reason for the low offer, address that reason directly in writing (e.g., show contrary expert reports, invoices, or medical records).

5. Use the Connecticut Insurance Department if the insurer is unresponsive or handling the claim unfairly

Connecticut regulators accept consumer complaints about claim handling and can investigate unfair claim settlement practices. Filing a complaint does not guarantee you will get more money, but the regulator can pressure the insurer, request records, and sometimes secure corrective action. For information on filing a complaint, see the Connecticut Insurance Department website: https://portal.ct.gov/cid.

6. Consider appraisal, mediation, or arbitration if available

If your policy contains an appraisal clause, it can be an efficient way to resolve a value dispute. If appraisal or arbitration is available, weigh their benefits (speed, lower cost) against limitations (limited discovery, limited remedies). Mediation is another option to obtain a negotiated increase without going to court.

7. Small-claims court for smaller disputes

If the amount in controversy falls within the Connecticut small-claims limit, you can file a claim in small-claims court. Small-claims court is designed to be user-friendly and less formal than Superior Court. See the Connecticut Judicial Branch small claims information: https://www.jud.ct.gov/SmallClaims/.

8. Lawsuit in Superior Court — and bad-faith claims

If the insurer’s conduct is wrongful and the amount justifies litigation, you can sue in Connecticut Superior Court. Possible claims include breach of contract (for not honoring the policy) and statutory or common-law bad-faith claims in certain circumstances. Bad-faith claims depend on the insurer’s conduct; courts will look at whether the insurer had a reasonable basis for its denial or low offer and whether it acted with reckless disregard for the insured’s rights.

Before suing, check any policy notice requirements and Connecticut procedural rules so you do not miss filing deadlines. You can find Connecticut statutes and the General Assembly website here: https://www.cga.ct.gov/.

9. Consider costs and attorney involvement

Litigation and arbitration have costs. If your claim is large or involves complex coverage issues, consult an attorney experienced in Connecticut insurance matters. An attorney can evaluate whether a bad-faith claim is viable, preserve evidence, negotiate, or litigate. If an insurer’s conduct is egregious, an attorney can advise on whether attorneys’ fees or punitive damages are possible under Connecticut law or the policy.

10. Timeliness — watch statutory and contractual deadlines

Connecticut law sets statutes of limitations for contract and tort claims. Policies also impose deadlines for filing proofs of loss, suits, or appraisal requests. Acting promptly protects your rights. If you are unsure of applicable deadlines, consult an attorney promptly.

When might you have a “bad faith” claim in Connecticut?

Connecticut recognizes that insurers owe duties to policyholders. A bad-faith claim typically requires showing the insurer lacked a reasonable basis for its conduct and either acted with reckless disregard for the insured’s rights or intentionally delayed or denied benefits. The specific facts matter: intentional misrepresentations, unreasonable delays, ignoring incontrovertible evidence, or refusing appraisal/arbitration in bad faith may strengthen a claim. Because these claims are fact-sensitive and procedural rules are strict, discuss the situation with a Connecticut attorney if you believe bad faith occurred.

What to do right now — a checklist

• Get the offer and any release in writing. Do not sign a release until you are sure it resolves all claims you want to close.
• Preserve all evidence: emails, photos, receipts, medical records, repair estimates, and notes of communications.
• Check your policy for appraisal, arbitration, and notice requirements.
• Send a clear written demand with supporting documents and a reasonable deadline.
• If the insurer still refuses, consider filing a complaint with the Connecticut Insurance Department: https://portal.ct.gov/cid.
• If the amount qualifies, consider small-claims court: https://www.jud.ct.gov/SmallClaims/.
• For large or complex claims, consult a Connecticut insurance attorney to evaluate breach-of-contract and potential bad-faith claims.

Helpful Hints

• Do not accept the insurer’s “final” offer until you are sure it covers everything and you understand any release language.
• Put all communications in writing. Follow up phone calls with an email summarizing the conversation.
• Use an organized file folder (physical or digital) with clear labels and dates for every document.
• Ask the insurer to explain precisely why it will not increase the offer and request any documents it relied on.
• If the insurer cites a coverage denial, request a written coverage position letter explaining the legal basis for the denial.
• If your policy offers appraisal, consider invoking it promptly if the dispute is over value.
• Filing a complaint with the Connecticut Insurance Department is free and can prompt an investigation; keep copies of your complaint and any responses.
• Before filing a lawsuit, confirm the relevant statute of limitations for contract and tort claims so you do not lose the right to sue.

Resources

• Connecticut Insurance Department (consumer help and complaints): https://portal.ct.gov/cid
• Connecticut Judicial Branch — Small Claims information: https://www.jud.ct.gov/SmallClaims/
• Connecticut General Assembly (statutes): https://www.cga.ct.gov/

Disclaimer: This article explains general principles and practical steps under Connecticut law. It is educational only and is not legal advice. For advice about your specific situation, consult a licensed Connecticut attorney.