Wrongful denial or underpayment
The central claim may be contractual: what did the policy cover, what loss occurred, and what benefits should have been paid?
Michigan insurance law without the marketing mythology
Can You Sue an Insurance Company for Bad Faith in Michigan?
Not as an independent first-party “bad faith” tort merely because an insurer wrongfully delays, underpays, or denies benefits. Michigan differs from states that recognize a separate tort action allowing policyholders to seek extra-contractual damages simply by proving bad-faith claim handling.
“Bad faith insurance claim” is a popular search term—not necessarily a Michigan cause of action
Policyholders understandably use “bad faith” to describe conduct they believe is unfair: an inadequate investigation, shifting explanations, a low estimate, repeated delay, or a denial they believe contradicts the policy. Lawyers and websites also use the phrase because consumers search for it.
But marketing terminology should not be confused with Michigan substantive law. The Michigan Supreme Court has declined to recognize the mere bad-faith breach of an insurance contract as an independent, separately actionable tort. Calling a dispute “bad faith” does not create a remedy Michigan law does not provide.
What Michigan law does provide
The absence of an independent first-party bad-faith tort does not mean an insurer may ignore its contractual and statutory obligations. Depending on the facts, a policyholder may have a breach-of-contract claim for unpaid policy benefits and may be entitled to other remedies provided by Michigan law.
For property claims, MCL 500.2006 addresses timely payment and provides for 12% simple interest on benefits not paid on a timely basis to an insured or person directly entitled to benefits under the insurance contract, subject to the statute's requirements. Whether interest is owed and on what amount requires analysis of the particular claim.
Bad claim handling and a “bad faith tort” are different questions
Delayed payment
Michigan's statutory-interest provisions can matter even though Michigan does not create a general first-party bad-faith tort.
Independent misconduct
Conduct genuinely independent of a contract breach can present separate legal questions. It should be analyzed under the elements of the actual claim—not converted into a generic “bad faith” label.
Be skeptical of slogans promising a Michigan “bad faith” case
A website can optimize for the words “insurance bad faith” without explaining the legal distinction. That may attract clicks, but it can leave a Michigan policyholder believing that every unreasonable denial creates a separate tort claim, punitive damages, or an automatic right to attorney fees. It does not.
Likewise, the fact that conduct may be regulated as an unfair insurance practice does not automatically mean an individual policyholder has a private damages action under every regulatory provision. The correct approach is to identify the policy benefits owed, the applicable statutes, and any genuinely independent cause of action supported by the facts.
What matters in a property claim
Focus on remedies that actually exist
Allyn PC evaluates Michigan property-insurance disputes based on the policy, proof of loss, claim record, unpaid benefits, statutory remedies, and viable causes of action. The objective is not to attach the most dramatic label to a claim. It is to identify what the insurer owes and the most effective lawful way to recover it.
Issues may include
- Coverage and exclusions
- Scope and valuation
- Replacement cost and depreciation
- Proof-of-loss requirements
- Delayed or withheld benefits
- MCL 500.2006 interest
- EUO and SIU disputes
- Breach-of-contract litigation
Property claim help before or after a denial
You do not need to invent a “bad faith” tort to have a serious insurance dispute. Allyn PC represents Michigan policyholders in fire claims, storm claims, water and mold claims, and other substantial property losses from claim development through litigation.
Request a free claim review