Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for advice on your specific situation.
Detailed Answer
When your Michigan auto insurer issues a low diminished value offer after repairing your vehicle, you can invoke the policy’s appraisal clause to obtain an independent valuation. An appraisal clause is a contractual tool that binds both you and the insurer to a neutral process for resolving disputes over the amount of loss.
1. Review Your Policy’s Appraisal Clause
Locate the section titled “Appraisal” or “Dispute Resolution” in your declarations page or policy handbook. This clause outlines timelines, notice requirements, and how each party selects an appraiser.
2. Submit a Written Demand
Send a demand letter or email to your insurer’s claims department, referencing your claim number. State clearly that you invoke the appraisal clause to challenge the diminished value assessment. Include:
- Your contact and claim information
- A statement that you dispute the insurer’s diminished value offer
- A request for appraisal under the policy
3. Select Your Appraiser
Under most Michigan policies, you and the insurer each choose a qualified appraiser with expertise in vehicle valuation. Criteria often include certifications from recognized automotive appraisal organizations.
4. Appraisers Appoint an Umpire
If your appraiser and the insurer’s appraiser cannot agree on diminished value, they must jointly select an impartial umpire. If they cannot agree on an umpire within a specified timeframe, follow the policy’s fallback procedure, which may involve notifying a court or arbitration service.
5. Conduct the Appraisal
The appraisers—and, if needed, the umpire—review repair records, market data, and comparable sales to estimate the vehicle’s post-repair diminished value. Each appraiser submits a written appraisal report.
6. Binding Award and Enforcement
The final award—usually the average or the umpire’s decision—becomes binding. If the insurer refuses to pay the appraisal award, you can file a breach of contract action in Michigan circuit court to enforce the judgment.
Applicable Michigan Law
Michigan requires insurers to handle claims in good faith. Unfair tactics may violate the Unfair Claims Settlement Practices Act (MCL 500.2006). See full text: MCL 500.2006.
Helpful Hints
- Keep all communications in writing—emails and certified letters create a clear record.
- Track deadlines in your policy to avoid forfeiting appraisal rights.
- Choose an appraiser experienced in diminished value claims to strengthen your position.
- Maintain copies of repair invoices, photos of damage, and market comparables.
- If negotiations stall, consider mediation before demanding court enforcement.