How to Contest a Final Insurance Offer After an Injury in Michigan
This FAQ-style guide explains the common steps to challenge a final settlement offer from an insurance company after you are injured in Michigan. It assumes you start with no legal background and explains practical steps, legal considerations under Michigan law, and where to get help.
Disclaimer
This is educational information only and not legal advice. For advice about your specific situation, consult a licensed Michigan attorney.
Detailed Answer: Step-by-step process to contest a final insurance offer
1. Identify exactly what the insurer’s “final offer” covers
Get the final offer in writing and review it carefully. Determine whether the offer covers:
- Medical bills and future medical care (first-party benefits such as Personal Injury Protection (PIP) for auto claims);
- Lost wages or wage loss;
- Property damage (if applicable);
- Non-economic damages (pain and suffering) in a third-party bodily-injury claim.
In Michigan, auto crash benefits are governed by the No-Fault Act (MCL 500.3101 et seq.). See the statute for how PIP benefits are defined: MCL 500.3101 (No-Fault Act).
2. Gather and organize your evidence
Collect the records that prove the value of your claim. Typical documents include:
- All medical records, itemized medical bills, treatment plans, and expert opinions about future care;
- Pay stubs and employer statements to document lost income;
- Repair estimates, receipts, or invoices for property damage;
- Police reports, photographs of the incident and injuries, and witness statements;
- Any written communications from the insurer (including the final offer letter).
3. Review your policy and applicable Michigan law
Read the insurance policy to confirm what benefits and limits apply. For Michigan auto claims, review the No-Fault Act provisions for PIP benefits (MCL 500.3101 et seq.).
If you are considering suing the at-fault driver for non-economic damages (pain and suffering), be aware Michigan’s No-Fault Act contains a threshold for recovery of noneconomic damages. The statute setting the threshold for a claim of serious impairment of body function is MCL 500.3135: MCL 500.3135. That statute helps determine whether you can pursue non-economic damages against a third party.
4. Respond in writing with a clear demand
Do not accept a final offer verbally. Send a written rejection and a counter-demand. A strong response should:
- State that you reject the insurer’s final offer;
- Attach key supporting documents (medical bills, notes, lost-wage proof, estimates);
- Set a reasonable deadline for response (commonly 10–30 days);
- Explain why the offer is inadequate (e.g., unpaid medical bills, future care not addressed, low valuation of lost wages).
Keep copies and send by a trackable method (certified mail or email with read receipt).
5. Use the insurer’s internal appeal and complaint options
Most insurers have an internal appeal or dispute procedure. Start there and keep records of dates, names, and responses. If you have not been satisfied by internal steps, you can file a consumer complaint with the Michigan Department of Insurance and Financial Services (DIFS): Michigan DIFS. DIFS can investigate complaints about denials, delays, or unfair practices.
6. Consider alternative dispute resolution (mediation or arbitration)
Some policies or claim programs allow or require mediation or arbitration. Mediation is a voluntary negotiation with a neutral mediator. Arbitration is a binding decision by a neutral arbitrator. Review your policy for ADR clauses. If ADR is available, it can be faster and less costly than court, but check whether arbitration decisions are binding before you proceed.
7. If negotiations fail, you may file a lawsuit
If the insurer still refuses to pay a fair amount, your options include filing a civil lawsuit. Common causes of action include breach of contract (for unpaid benefits) and negligence (against a third party responsible for your injury). If you file a lawsuit in Michigan courts, be mindful of procedural rules and filing deadlines (statutes of limitations). For auto-related third-party claims, remember the No-Fault Act’s threshold for non-economic damages under MCL 500.3135.
8. When to hire a Michigan attorney
Consider hiring an attorney if any of the following apply:
- Your injury is serious, permanent, or requires ongoing care;
- The insurer denies or underpays PIP or refuses to cover clearly eligible expenses;
- Liability is disputed or complex;
- You face a short deadline or the insurer’s final offer is far below documented losses.
A lawyer can evaluate your case, draft a formal demand, handle settlement negotiations, and, if necessary, file suit and represent you in court or arbitration.
Practical timeline and next actions
- Immediately obtain and organize all medical and billing records.
- Request a written explanation of the insurer’s final offer and an itemization of what it paid and why.
- Send a written counter-demand and set a deadline (10–30 days).
- If unresolved, file an internal appeal and/or a complaint with DIFS.
- Decide whether to pursue ADR (if available) or file suit—consult an attorney before filing.
Helpful Hints
- Keep a centralized file (paper or electronic) of every document and communication with the insurer, providers, and third parties.
- Never sign away your rights or accept a final release until you fully understand what you are giving up and have reviewed it with an attorney if injuries are significant.
- A demand letter with clear documentation often gets better results than phone calls. Be factual and concise.
- Ask the insurer for an itemized statement showing how it calculated the offer.
- Do not give recorded or signed statements to the insurer without thinking or consulting counsel—answers can be used against you.
- If you accept a settlement, get it in writing and confirm who will pay outstanding medical liens or provider bills.
- Contact Michigan DIFS (https://www.michigan.gov/difs) if the insurer is unresponsive or you suspect unfair practices.
- Time matters: do not delay collecting records or seeking legal advice—statutes of limitation and policy deadlines can bar claims.
Key Michigan legal references
- No-Fault Act (PIP and related provisions): MCL 500.3101 et seq.
- Threshold for non-economic damages in auto cases (serious impairment): MCL 500.3135
- Michigan Department of Insurance and Financial Services (consumer help and complaints): https://www.michigan.gov/difs
- Michigan Courts (filing lawsuits and court resources): https://courts.michigan.gov
Final note
Contesting a final offer is a combination of careful documentation, understanding your policy and Michigan law, clear written communication, and—often—legal negotiation. If the amount in dispute is significant or the insurer has taken a firm refusal position, talk with a Michigan attorney promptly to protect your rights.