Yes. When a Michigan insurer wrongly denies or underpays a valid claim, the policyholder can generally sue for breach of the insurance contract. Michigan law also provides 12 percent penalty interest on many claims that are not paid on time. For property claims, the policy usually sets a one-year deadline to sue, which is generally tolled from the time you give notice of the loss until the insurer formally denies the claim.
Homeowners and business owners across Michigan often receive a denial after an examination under oath or a long special investigations review. A denial letter is not the final word, but the deadlines that follow it are strict.
Common Reasons Insurers Deny Claims
Stated Reason | What It Usually Means |
|---|---|
Concealment or misrepresentation | The insurer claims you gave false information in the claim, proof of loss, or EUO |
Failure to cooperate | The insurer says you did not provide documents or attend an EUO |
Policy exclusion | The insurer argues the cause of loss is excluded, such as wear and tear or flood |
Late notice | The insurer claims the loss was reported too late |
Vacancy or occupancy issues | The insurer argues the property was vacant or used in a way the policy excludes |
Arson or fraud suspicion | The insurer believes the loss was intentionally caused |
Many of these denials depend on how you present statements and documents during the claim. Learn more about what an examination under oath is and why it matters.
Your Main Legal Remedies
Breach of contract. The core claim is that the insurer failed to pay what the policy promises. If you prove coverage and the amount of the loss, the court can award the benefits owed.
Penalty interest. Under Michigan’s Uniform Trade Practices Act, insurers that do not pay a claim within 60 days after receiving satisfactory proof of loss may owe 12 percent annual interest on the amount due. This interest can add meaningful value to a claim that was delayed or wrongly denied.
Appraisal. When the dispute is about the amount of the loss rather than coverage, many Michigan property policies include an appraisal process where each side selects an appraiser and an umpire resolves differences.
Michigan generally does not recognize a separate bad faith tort claim for first-party property insurance disputes in the way some states do, so the breach of contract claim and statutory interest are usually the main tools.
The One-Year Deadline
Michigan’s standard fire policy provisions, which apply to many homeowners and commercial property policies, require a lawsuit to be filed within one year after the loss. That period is generally tolled from the date you notify the insurer of the loss until the insurer formally denies liability. In practice, the clock often starts running again on the date of the denial letter. Missing this deadline can end the claim, so calculate it as soon as you receive a denial. If you are unsure of the date, assume the earlier possibility and act quickly.
Steps to Take After a Denial
- Read the denial letter carefully and note the stated reasons and the date.
- Request a complete copy of your policy, including declarations and endorsements.
- Request your EUO transcript and any recorded statements.
- Gather your proof of loss, photos, receipts, and correspondence.
- Calculate the remaining time to sue under your policy.
- Consider filing a complaint with the Michigan Department of Insurance and Financial Services.
A regulatory complaint can prompt a response from the insurer, but it does not stop the lawsuit deadline. Homeowners can find more guidance on our Michigan homeowners insurance claims page.
Frequently Asked Questions
Can I sue my insurance company for denying my claim in Michigan?
Yes, generally for breach of the insurance contract, often along with a claim for penalty interest.
How long do I have to sue my insurer in Michigan?
Many property policies require suit within one year, tolled from notice of loss until formal denial.
What is penalty interest in Michigan insurance claims?
Interest at 12 percent per year on claims not paid within 60 days after satisfactory proof of loss.
Does Michigan allow bad faith lawsuits against insurers?
Michigan generally does not recognize a separate bad faith tort in first-party property disputes, so contract claims and statutory interest are the main remedies.
Should I complain to the Michigan Department of Insurance?
You can, but a complaint does not pause the deadline to sue.
Free Confidential EUO Consultation
Henri O. Harmon represents Michigan policyholders whose claims have been denied after an examination under oath or investigation. When you call for a free confidential EUO consultation, our office will ask about your claim, the denial letter, and your deadline, then explain whether your claim can be challenged and what to do next. Learn more about our Michigan examination under oath representation.