How to appeal a low insurance settlement offer after an accident in Michigan

This FAQ-style guide explains the practical steps a person in Michigan can take when an insurance company offers a settlement that seems unreasonably low after an auto accident. It summarizes common options, documents to gather, and how state resources can help. This is educational information only — not legal advice. If you need a legal opinion, consult a licensed Michigan attorney.

Short answer

If you receive a low settlement offer in Michigan, the usual process is: (1) review your policy and the offer; (2) collect and organize evidence of damages and liability; (3) send a written demand that documents the claim and explains why the offer is insufficient; (4) use any contract remedies (appraisal, arbitration) if your policy includes them; (5) file a complaint with the Michigan Department of Insurance and Financial Services (DIFS) if the carrier is mishandling your claim; and (6) consider filing suit in court (breach of contract or other claim) or pursuing small claims court if the amount fits the court limits. Each option has deadlines and specific procedures.

Detailed answer — step-by-step under Michigan law and practice

1. Read your insurance policy carefully

Your contract controls most remedies. Look for sections titled “limits,” “valuation,” “appraisal,” or “dispute resolution.” An appraisal clause (common for property/vehicle damage) lets you request an independent appraisal to resolve disputes about the value of property damage. Arbitration clauses may require arbitration before a lawsuit. Know whether you are dealing with first-party benefits (your own PIP, collision, or UM/UIM) or the at-fault party’s liability coverage — remedies differ.

2. Gather documentation

• Medical records, billing statements, and doctor notes showing injuries and treatment.
• Vehicle repair estimates, photos of damage, and receipts for repairs or replacement transportation.
• Police reports and witness statements supporting fault.
• Copies of all communications with the insurer (emails, letters, claim notes).

3. Make a detailed written demand

Prepare a demand letter that explains the facts, cites supporting documents, calculates damages, and states a specific settlement amount and a response deadline. Include copies of your key evidence. Send the letter by certified mail or another way that gives proof of delivery. A clear demand often prompts a better offer.

4. Use contract remedies: appraisal and arbitration

If your policy contains an appraisal clause for property damage (common in collision and property policies), you can invoke appraisal: each side selects an appraiser, the two appraisers choose an umpire, and the decision on value can bind the parties for that issue. If the policy requires arbitration for disputes, you must follow the arbitration process before filing a court action unless the clause is unenforceable. Check the policy language and follow those procedures exactly.

5. Internal appeals and escalation within the insurer

Ask for a supervisor or an internal appeal. Provide new evidence and explain why the prior valuation or liability finding is incorrect. Keep a written record of escalation, dates, and representatives’ names.

6. File a complaint with Michigan DIFS

If you suspect the carrier is unfairly denying or undervaluing your claim, you can file a complaint with the Michigan Department of Insurance and Financial Services (DIFS). DIFS can investigate consumer complaints, request information from the insurer, and sometimes secure corrective action. File online or by phone. See DIFS consumer resources here: https://www.michigan.gov/difs/insurance/file-complaint and general auto insurance information: https://www.michigan.gov/difs/insurance/auto-insurance.

7. Consider litigation — breach of contract or claim in court

If other options fail, you may be able to sue the insurer for breach of contract to recover the policy benefits you claim. Small claims court can be an efficient option for modest amounts (check Michigan Courts for limits and procedures). For larger disputes, a lawsuit in circuit court is typical. Lawsuits have strict deadlines (statutes of limitations) and procedural rules; consult a Michigan attorney early to preserve rights.

8. Timing and statutory context

Michigan’s no-fault law and insurance regulations govern many auto insurance disputes. For example, the Michigan No-Fault Act (MCL 500.3101 et seq.) addresses personal protection insurance and related benefits. State insurance rules also prohibit certain unfair claim practices under the insurance code. You can view the No-Fault Act here: https://www.legislature.mi.gov/mileg.aspx?page=GetObject&objectname=mcl-500-3101.

When to get a lawyer

Consider consulting a Michigan personal injury or insurance attorney if:

• Your medical bills, lost wages, or vehicle damage exceed the insurer’s offer by a large margin.
• The insurer denies coverage or asserts complex legal defenses.
• There is a deadline approaching (statute of limitations) or the policy contains a binding arbitration clause you must meet.
• You believe the insurer engaged in unlawful unfair claim practices.

Helpful Hints

• Document everything. Detailed files help you when negotiating, filing complaints, or going to court.
• Send written demands with a clear calculation and deadline. Ambiguity invites lowball offers.
• Use policy remedies first. If your contract provides appraisal or arbitration, follow those steps precisely to avoid waiving rights.
• File a DIFS complaint early if you suspect unfair practices — DIFS can mediate or investigate conduct by the insurer.
• Keep medical treatment continuous and well-documented. Gaps in care can weaken your claim for damages.
• Get multiple repair estimates and photos for vehicle damage. Appraisals favor documentation and consistent valuations.
• Ask whether your attorney works on contingency (common in injury cases) — that can shift the financial risk if litigation is needed.

Resources

• Michigan Department of Insurance and Financial Services (DIFS) — file a complaint and consumer guides: https://www.michigan.gov/difs/insurance/file-complaint
• No-Fault Act (Michigan Compiled Laws) — MCL 500.3101 et seq.: https://www.legislature.mi.gov/mileg.aspx?page=GetObject&objectname=mcl-500-3101
• Michigan Courts self-help and small-claims information: https://courts.michigan.gov

Disclaimer: This article explains general Michigan procedures and resources and is not legal advice. It does not create an attorney-client relationship. Laws change, and how they apply depends on the facts. For advice about your specific case, consult a licensed Michigan attorney.