Why Do Insurance Companies Drag Out Settlements in Michigan?
When your home or business suffers serious property damage, you expect your insurance company to investigate the claim promptly and pay what the policy promises. In reality, many Michigan policyholders experience unexplained delays, repeated requests, and prolonged negotiations that stretch on for months—or longer.
Insurance companies delay settlements for one simple reason: delay increases leverage. The longer a claim remains unresolved, the more financial pressure falls on the policyholder, increasing the likelihood of an underpaid settlement. Understanding why insurers delay—and what Michigan law allows you to do in response—is critical to protecting your rights and recovering full compensation.
Why Insurance Companies Delay Claim Settlements
Insurance carriers use delay tactics strategically. Common motivations include:
Reducing Claim Payouts
As repair costs, temporary housing expenses, and business losses accumulate, policyholders may feel forced to accept a low settlement simply to move forward.
Holding Funds Longer
By delaying payment, insurers retain control of claim funds, improving cash flow and investment returns while the policyholder absorbs the loss.
Discouraging Claims Entirely
Some delays are designed to exhaust or intimidate policyholders into abandoning valid claims altogether.
Common Insurance Delay Tactics Used in Michigan Claims
Michigan policyholders often encounter the same repeatable delay strategies across residential and commercial claims:
Repeated or Duplicative Documentation Requests
Insurers may repeatedly ask for documents already provided, creating confusion and stalling progress.
Unnecessary or Prolonged Investigations
Straightforward fire, water, or storm claims may be subjected to extended investigations with no clear justification.
Lowball Damage Estimates
Insurers frequently undervalue repairs or replacement costs, forcing drawn-out negotiations to obtain fair compensation.
Vague, Shifting, or Inconsistent Communication
Unclear explanations, rotating adjusters, and contradictory information delay resolution and weaken accountability.
These tactics are not accidental. They are designed to slow claims down and reduce payouts.
Your Rights Under Michigan Insurance Law
Michigan law requires insurers to handle claims promptly and in good faith. When an insurance company delays payment without reasonable cause, the consequences can extend well beyond the claim amount.
Penalty Interest for Late Payment (MCL 500.2006)
Under Michigan Compiled Laws § 500.2006, insurers may owe 12% penalty interest on benefits that are not paid within the required time frame after receiving satisfactory proof of loss.
Breach of Contract
Failure to pay covered benefits under the policy may constitute a breach of contract, allowing policyholders to pursue litigation for the full amount owed.
Attorney Fees and Additional Remedies
In cases involving unreasonable delay, policyholders may recover attorney fees and other damages designed to deter insurer misconduct.
Insurance companies understand these risks—which is why delays often stop once experienced legal counsel becomes involved.
How to Stop Insurance Settlement Delays
Insurance delays are rarely resolved by waiting. Every unanswered email, every unexplained request, and every undervalued estimate strengthens the insurer’s position unless challenged.
An experienced Michigan property insurance attorney can:
Force written explanations for delays
Enforce statutory deadlines
Document bad-faith conduct
Push claims toward resolution through negotiation, appraisal, or litigation
At Fabian, Sklar, King & Liss, we deal with delayed insurance settlements every day. We know how Michigan insurers operate, how they justify delays, and how to apply legal pressure that produces results. Learn more about our specific practice areas here.
Don’t Let Insurance Delays Cost You What You’re Owed
If your insurance company is dragging out your property damage claim, waiting only benefits the insurer. Michigan law provides powerful tools to stop unjustified delays—but those tools must be used correctly.
Fabian, Sklar, King & Liss represents homeowners and businesses statewide in delayed, denied, and underpaid property insurance claims. We hold insurers accountable and pursue the full benefits our clients are entitled to receive.
Call 248-553-2000 today for a confidential, no-obligation consultation and let our attorneys take immediate action to protect your claim.