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After a car accident, you expect the insurance company to review your claim and pay the benefits available under your policy promptly. Unfortunately, many injured drivers in Michigan face repeated requests for paperwork, long periods of silence, reduced payments, or an outright claim denial.
A delay or denial does not mean your claim is over. Understanding why the insurer is disputing your benefits and securing legal guidance early can help you protect your rights and recover the full compensation you are owed.
Why Do Auto Insurance Companies Delay or Deny Claims?
An insurance company may delay or deny a Michigan auto insurance claim for several reasons—some legitimate, but many used as negotiation tactics to limit payouts.
An insurer may argue that:
- The policy was not active or does not cover the specific loss
- The crash or injury was not reported within strict policy timeframes
- Additional medical records, wage history, or proof of loss are needed
- Your injuries were pre-existing and not caused by the crash
- Medical treatment was not “reasonably necessary” for your care
- You failed to cooperate with an investigation or attend an Insurance Medical Examination (IME)
- Another insurance policy holds higher priority under Michigan’s No-Fault order of priority
- The requested benefit amount is higher than what the insurer believes it owes
Some disputes involve simple missing information. In other cases, insurers interpret policy language aggressively to avoid paying legitimate claims.
How Long Does an Insurance Company Have to Process a Claim in Michigan?
Michigan law sets clear statutory deadlines that insurance companies must follow when handling auto claims.
The 30-Day PIP Payment Rule (MCL 500.3142)
Under Michigan’s No-Fault insurance system, Personal Injury Protection (PIP) benefits are overdue if not paid within 30 days after the insurer receives reasonable proof of the fact and amount of loss.
- 12% Penalty Interest: If an insurer delays overdue PIP benefits (medical bills, wage loss, replacement services), they are legally required to pay a 12% simple annual interest penalty on the overdue amount under MCL 500.3142.
- Attorney Fee Shifting (MCL 500.3148): If an insurer unreasonably refuses or delays paying PIP benefits, Michigan law allows the court to order the insurer to pay your attorney’s fees.
Vehicle Damage Claims
Vehicle-damage claims (under Collision or Mini-Tort coverage) generally become overdue when they remain unpaid for more than 60 days after the insurer receives all necessary supporting documentation.
What Should You Do After Your Claim Is Delayed or Denied?
If your insurance company stops paying benefits or denies your claim, take immediate action:
- Request a Written Explanation: Ask the insurance adjuster to provide the exact reasons for the denial in writing, citing the specific policy terms or missing evidence.
- Review the Denial Letter Carefully: Look for missing document requests, tight appeal deadlines, or notices scheduling a mandatory medical exam.
- Preserve All Records: Keep copies of every medical bill, explanation of benefits (EOB), email, letter, and wage slip. Document every phone conversation with dates, times, and representative names.
- Be Cautious with IMEs: Insurers often schedule an “Independent Medical Examination” with a doctor they select. These exams are frequently used to terminate benefits. Consult an attorney before attending.
Important: Do not assume the insurance company’s interpretation of your policy or medical records is correct. Insurers routinely deny claims that are legally valid under Michigan No-Fault laws.
Can You File a Complaint Against the Insurer?
Michigan policyholders who believe an auto insurance company is acting in bad faith or unreasonably delaying claims can file a formal complaint with the Michigan Department of Insurance and Financial Services (DIFS).
DIFS will contact the insurer, request a written response, and review whether state insurance regulations were violated. While a DIFS complaint creates an official regulatory record, it does not replace legal representation or guarantee that your denied PIP benefits will be reinstated.
Why Legal Help Matters When Fighting an Insurance Denial
When an insurer delays or denies a claim, you shouldn’t have to choose between fighting for your benefits and focusing on your medical recovery.
Michigan Accident Attorneys can help by:
- Reviewing your insurance policy, denial letters, and claim file
- Gathering complete medical records and physician statements to prove necessity
- Filing formal demands for overdue PIP benefits plus 12% penalty interest
- Protecting you from aggressive IME doctors and recorded statement traps
- Communicating directly with insurance adjusters and defense lawyers
- Filing a lawsuit before Michigan’s strict 1-year statute of limitations (One-Year Back Rule) expires on unpaid PIP benefits
Avoid These Critical Mistakes After a Denial
- Waiting too long to respond: In Michigan, you cannot recover PIP benefits for expenses incurred more than 1 year before filing a lawsuit under the One-Year Back Rule.
- Stopping medical treatment: Gaps in treatment give the insurer an excuse to claim you have fully recovered.
- Signing releases or settlement offers: Never sign a release or accept a partial settlement check marked “final payment” without having an attorney review it first.
Michigan Accident Attorneys Can Help
An insurance company’s delay or denial does not have to be the final word on your injury claim.
Michigan Accident Attorneys will review your policy, gather the evidence needed to challenge the insurer, and fight to secure every dollar of PIP and third-party compensation you deserve under Michigan law.
If your auto insurance claim was delayed, reduced, or denied in Michigan, call (877) 225-5622 today for a free, confidential claim evaluation.
