What to Do If an Insurance Company Refuses to Increase Its Final Offer in Minnesota

Short answer: Don’t accept a “final offer” as the end of the road. In Minnesota you have several options: gather evidence, use contract remedies such as an appraisal clause (if your policy has one), negotiate or demand further justification, file a complaint with the Minnesota Department of Commerce, pursue appraisal or alternate dispute resolution, or sue for breach of contract — and in some cases pursue an extra-contractual claim if the insurer engaged in unfair claim settlement practices. This article explains each step and how to decide what to try first.

Detailed answer — practical steps and legal options under Minnesota law

1. Understand what “final offer” means

Insurers will sometimes label an amount as a “final” offer to pressure you. That label has no automatic legal effect. Your rights come from the insurance policy, Minnesota law, and any contract terms (including appraisal, arbitration, or suit-limitation clauses). Review your policy to identify deadlines, proof-of-loss requirements, and whether the policy includes an appraisal or other dispute-resolution process.

2. Immediate practical steps

• Document everything: keep the insurer’s letters, emails, notes of phone calls (who you spoke with, date, time, what was said), repair estimates, medical records, photos, and receipts.
• Send a clear written demand: state why the offer is too low, attach evidence (estimates, bills, photos), and request a specific remedy or settlement amount. Request a written explanation of how the insurer calculated its offer.
• Check policy deadlines: some policies require timely proof of loss or have short windows to demand appraisal or start litigation. Don’t miss those deadlines.

3. Use the policy’s appraisal or dispute clause (if available)

Many property policies include an appraisal clause to resolve disputes about the value of loss. Appraisal is typically faster and cheaper than litigation. If your policy contains appraisal language, follow the notice and procedure requirements exactly (selecting appraisers, selecting an umpire if needed, timelines). Appraisal resolves the amount of loss — not necessarily coverage defenses — but it often forces the insurer to pay a better number if the independent appraiser finds a higher value.

4. Demand a reasoned explanation and evidence from the insurer

Under good practice (and under state consumer-protection expectations), insurers should tell you how they calculated the offer and identify supporting data. Ask the insurer to produce the claim file, adjuster reports, estimates, and any records of communications. If the insurer refuses, note that in your file and reference this when you later complain to the regulator or a court.

5. File a complaint with the Minnesota Department of Commerce

If you believe the insurer acted unfairly or failed to follow legal or regulatory claim-handling standards, you can file a complaint with the Minnesota Department of Commerce, Insurance Division. The Department will review the claim file, may contact the insurer, and can require corrective action in some cases. This process does not replace your right to sue, but it can produce helpful information and sometimes a better resolution. Minnesota Department of Commerce, insurance complaints: https://mn.gov/commerce/consumers/complaints/insurance/

6. Consider mediation or arbitration

Mediation can produce a negotiated settlement without the time and cost of a lawsuit. Arbitration is a binding private process that parties sometimes choose in lieu of court. Check your policy — it may require or permit these processes.

7. Evaluate a lawsuit for breach of contract or statutory claims

If negotiation, appraisal, and regulatory complaints do not produce a fair result, you can sue for breach of contract to recover the policy benefits you believe are due. In select circumstances, Minnesota law also provides remedies for unfair claim settlement practices. The Minnesota Unfair Claim Settlement Practices statute and related rules prohibit certain insurer conduct; if an insurer’s refusal to increase an offer reflects deceptive or unreasonable practices, you may be able to seek additional remedies beyond the policy amount. For general statutory guidance, see Minnesota’s insurance statutes: https://www.revisor.mn.gov/statutes/cite/72A.20 (state law on unfair claim settlement practices and related duties).

8. Timing and costs

Lawsuits take time and cost money. Weigh the value of the claim, expected attorney fees (many insurance disputes are handled on contingency or hourly plus costs), court filing fees, and the likelihood of success. For smaller claims, Minnesota small claims court may be an efficient forum; learn more at the Minnesota Judicial Branch self-help pages: https://www.mncourts.gov/Help-Topics/Small-Claims.aspx.

9. When to hire an attorney

Consider hiring an attorney when:

• The insurer denies coverage or advances coverage defenses;
• The disputed amount is significant relative to costs of litigation;
• The insurer refuses to explain its valuation or refuses appraisal when your policy allows it;
• You suspect the insurer’s conduct is unfair, deceptive, or violates Minnesota insurance law; or
• You want an advocate to handle negotiations, appraisal selection, or litigation.

An attorney experienced in Minnesota insurance disputes can evaluate coverage, calculate damages, send effective demand letters, represent you in appraisal or mediation, and file suit if necessary.

Helpful Hints

• Don’t accept a “final” offer without written justification. Ask for the claim file and a breakdown of how the number was calculated.
• Review your insurance policy carefully for appraisal, arbitration, or suit-limitation clauses and follow those procedures exactly.
• Document everything and preserve all evidence (photos, receipts, estimates, and communications).
• File a regulatory complaint with the Minnesota Department of Commerce if you suspect unfair claims handling: https://mn.gov/commerce/consumers/complaints/insurance/.
• Consider appraisal for property damage disputes — it’s often faster and cheaper than a lawsuit.
• For low-dollar disputes, explore Minnesota small claims court: https://www.mncourts.gov/Help-Topics/Small-Claims.aspx.
• If you hire an attorney, ask about fee arrangements (contingency vs. hourly) and whether the attorney will advance costs.

Next step: Gather your policy, the insurer’s written offer, estimates, and any supporting documents. If you want assistance deciding whether to demand appraisal, mediation, or litigation, consult an attorney who handles insurance claims in Minnesota.

Disclaimer: This article is for general informational purposes only and is not legal advice. It does not create an attorney-client relationship. For advice about your specific situation, consult a licensed Minnesota lawyer.