Michigan Bad Faith Insurance Attorneys
At Liss + Earls, we have represented Michigan policyholders against insurance companies for nearly 40 years. When an insurer acts in bad faith — refusing to pay what you are owed under your policy — our attorneys have the experience, resources, and determination to fight back. We handle insurance disputes involving residential homes, commercial properties, and high-value losses across Michigan. We are also licensed in Ohio and represent select clients nationwide in large commercial property damage litigation.
What Is Bad Faith Insurance in Michigan?
When you pay your insurance premiums, you expect your insurance company to honor the terms of your policy. When an insurer unreasonably denies a valid claim, deliberately delays payment, or offers far less than what your claim is worth, most people would call that insurance bad faith. These are exactly the types of insurance disputes our attorneys handle every day.
An important distinction: unlike some states, Michigan does not recognize a standalone “bad faith” tort for first-party property insurance claims. That does not mean you are without remedies. Michigan provides powerful legal tools to hold insurers accountable — including breach of contract claims, 12% penalty interest for late payment under MCL 500.2006, and attorney fee recovery. These statutory protections are among the strongest in the country for policyholders, and our attorneys know how to use every one of them.
Common Examples of Insurance Bad Faith
Insurance companies, unfortunately for you, have a business model that benefits from minimizing payouts. While some claim disputes are legitimate, many policyholders experience tactics that cross the line into bad faith. Common examples include
Wrongful Claim Denials
Your insurer denies your claim without a reasonable basis, ignores evidence you submitted, or misinterprets your policy language to avoid paying. This is one of the most common forms of bad faith and often affects fire damage, water damage, and storm damage claims.
Unreasonable Delays
Michigan law requires insurers to investigate and process claims promptly. When an insurance company drags out the claims process for months — repeatedly requesting the same documents, failing to assign an adjuster, or simply not responding — they may be acting in bad faith.
Underpaying Valid Claims
Michigan law requires insurers to investigate and process claims promptly. When an insurance company drags out the claims process for months — repeatedly requesting the same documents, failing to assign an adjuster, or simply not responding — they may be acting in bad faith.
Failure to Properly Investigate
Insurance companies have a duty to conduct a thorough and fair investigation of every claim. When an insurer makes a coverage decision without fully examining the damage, interviewing witnesses, or reviewing all submitted documentation, this failure can constitute bad faith.
Misrepresention
Some insurers tell policyholders that certain types of damage are not covered — when in fact the policy does provide coverage. Misrepresenting or misinterpreting the language of your policy to avoid paying a claim is a clear act of bad faith.
Pressuring you to take a lower settlement then you should
Pressuring you to accept a lowball settlement, warning you that hiring an attorney will delay your claim, or suggesting your claim could be referred for fraud investigation without any basis—these are all intimidation tactics that can constitute bad faith.
How Michigan Law Protects Policyholders
Michigan does not recognize a common law “bad faith” tort for first-party property insurance claims. However, that does not leave policyholders without recourse. Michigan’s statutory framework provides some of the strongest policyholder protections in the country, and our attorneys know how to use each of them to hold insurance companies accountable.
Breach of Contract
Every insurance policy is a contract. When an insurer fails to honor the terms of that contract — by denying a covered claim, underpaying, or failing to pay promptly — Michigan policyholders can bring a breach of contract action to recover the full benefits owed under the policy, plus 12% penalty interest and attorney fees.
12% penalty interest
This is one of Michigan’s most powerful policyholder protections. When an insurer fails to pay a property insurance claim within 60 days after a satisfactory proof of loss is filed, the insurer must pay 12% annual interest on the unpaid amount. On a $1,000,000 claim, that is $120,000 per year in penalty interest alone. This creates significant financial pressure on insurers to pay legitimate claims promptly rather than dragging out the process. Our attorneys use this statute aggressively in every case where it applies.
What Can You Recover When Your Insurer Won't Pay?
When your insurance company wrongfully denies, delays, or underpays your Michigan property claim, you may be entitled to recover:
- Full policy benefits — The complete amount your insurer should have paid under your policy
- 12% penalty interest — Under MCL 500.2006, accruing from 60 days after your proof of loss was filed. On larger claims, this adds up to tens of thousands of dollars per year and is a powerful incentive for insurers to settle
- Attorney fees and litigation costs — Recoverable in many Michigan property insurance disputes, so that fighting your insurer does not come out of your recovery
- Consequential damages — In certain cases, additional losses you suffered because of the delay or denial, such as temporary housing costs or lost rental income
The specific damages available depend on the facts of your case and your policy. Our attorneys will evaluate your situation and explain what recovery may be possible.
Types of Property Insurance Bad Faith Claims We Handle
Our firm concentrates on property insurance bad faith involving:
- Fire and smoke damage claims — Denied or underpaid claims after a house fire or commercial fire
- Water damage and flood claims — Disputes over burst pipes, sewage backup, and flooding coverage
- Storm and wind damage claims — Roof damage, hail damage, and tornado claims that insurers minimize
- Business interruption claims — When insurers refuse to cover lost income during property repairs
- Explosion and blast damage claims — Complex claims involving gas explosions and industrial accidents
- Large loss and high-value claims — Commercial properties, luxury homes, and claims exceeding $5,000,000
- Examination Under Oath (EUO) — When insurers use the EUO process as a tool to deny your claim
Why Choose Liss + Earls for your Bad Faith Insurance Claim
- Nearly 40 years of experience — Our firm has been fighting for Michigan policyholders since 1986, formerly as Fabian, Sklar, King & Liss
- Property insurance is all we do — Unlike general practice firms, our attorneys focus exclusively on property insurance claims and insurance coverage disputes
- Over $500 million in awards recovered for our clients — We have handled property insurance disputes involving millions of dollars in insured losses
- We know how insurers operate — Decades of experience means we understand the strategies, delay tactics, and pressure points that insurance companies use
- Deep knowledge of Michigan insurance law — We know MCL 500.2006, the Uniform Trade Practices Act, and the case law that protects Michigan policyholders inside and out
- Licensed in Ohio and Representing Insureds Nationwide in select Large Value Commercial Property Insurance Claims
- No fee unless we recover — We handle bad faith cases on a contingency basis, so you pay nothing unless we win
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Your Insurance Company has Lawyers, now you do too
- Nearly 40 years of experience — Our firm has been fighting for Michigan policyholders since 1986, formerly as Fabian, Sklar, King & Liss
- Property insurance is all we do — Unlike general practice firms, our attorneys focus exclusively on property insurance claims and insurance coverage disputes
- Over $500 Million recovered for our clients—we have handled property insurance disputes involving millions of dollars in insured losses
- We know how insurers operate — Decades of experience means we understand the strategies, delay tactics, and pressure points that insurance companies use
- Deep knowledge of Michigan insurance law — We know MCL 500.2006, the Uniform Trade Practices Act, and the case law that protects Michigan policyholders inside and out
- No fee unless we recover — We handle bad faith cases on a contingency basis, so you pay nothing unless we win