Michigan Property Claims and Settlement

Michigan has specific requirements for handling property insurance claims.

Claims Timeline Requirements

Required Timeframes

Proof of Loss

Michigan property policies typically require:

• Signed statement under oath
• Description of loss
• Date and cause of loss
• List of damaged/destroyed property
• Value of loss
• Documentation (photos, receipts, etc.)

Investigation Requirements

Insurers must:

• Investigate claims promptly
• Request all necessary information upfront
• Not delay investigation
• Communicate with policyholder regularly

Appraisal Process

Michigan property policies include appraisal provisions for disputed values:

How Appraisal Works

When Appraisal Applies

• Dispute over amount of loss
• Not disputes over coverage
• Policy must include appraisal clause
• Costs usually shared

Unfair Claims Practices

Michigan prohibits unfair claims settlement practices:

Prohibited Practices

• Misrepresenting policy provisions
• Failing to acknowledge claims promptly
• Failing to communicate claim decisions
• Denying claims without investigation
• Offering unreasonably low settlements
• Delaying payment without reason
• Failing to explain denial reasons
• Using threatening tactics

Penalties for Violations

Mortgage Clause Provisions

Property policies with mortgage clauses must:

Mortgagee Rights

• Receive notice of cancellation
• Receive claim payments (as interest appears)
• Have protection even if insured violates policy
• Be notified of policy changes

Loss Payable Clause

• Payment to mortgagee as interest appears
• Mortgagee submits proof of loss if insured fails
• Standard mortgage clause protects mortgagee's interest

Subrogation

After paying a claim, insurers may pursue:

• Recovery from negligent third parties
• Insured must cooperate with subrogation
• Insured cannot waive insurer's subrogation rights
• Recovery reduces insurer's loss