Insurance Claim Denial Appeal - Maryland

INSURANCE CLAIM DENIAL APPEAL — MARYLAND

TABLE OF CONTENTS

1. Maryland Procedural Roadmap
2. Pre-Appeal Checklist
3. PART A — Internal Appeal / Re-Evaluation Demand Letter
4. PART B — Time-Limited Demand for Payment
5. PART C — Demand for Appraisal Under § 27-605
6. PART D — § 27-1001 Complaint to the MIA
7. Maryland Practice Notes
8. Sources and References

1. MARYLAND PROCEDURAL ROADMAP

2. PRE-APPEAL CHECKLIST

☐ Pull the declarations page, full policy form, all endorsements, and any prior policies covering the loss date.

☐ Confirm timely notice of loss and any sworn proof of loss were submitted within the policy time.

☐ Confirm the insured's cooperation obligations were satisfied (recorded statement, EUO if requested, document production).

☐ Identify the precise reason for denial (coverage exclusion, late notice, prior loss, valuation, lack of physical damage, wear and tear, etc.).

☐ Determine whether the dispute is about coverage (not appraisable) or amount of loss (appraisable under § 27-605).

☐ Calendar all deadlines: contractual suit-limitation (often two years for property), three-year contract limitations under § 5-101, MIA filing window.

☐ Compile evidence: photographs, video, repair estimates, expert reports (engineering, building consultant, public adjuster), receipts, ALE documentation.

☐ Calculate damages: replacement cost vs. ACV, depreciation, code upgrades, ALE/loss of use, business income if commercial.

3. PART A — INTERNAL APPEAL / RE-EVALUATION DEMAND LETTER

[VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AND EMAIL]

Date: [__/__/____]

[CLAIMS DEPARTMENT — APPEALS UNIT]

[INSURER NAME]

[STREET ADDRESS]

[CITY, STATE ZIP]

RE: REQUEST FOR RE-EVALUATION OF CLAIM DENIAL / UNDERPAYMENT

Dear Claims Manager:

This letter is submitted on behalf of the above-referenced Insured and constitutes a formal request for re-evaluation of your [denial of coverage / partial payment] dated [__/__/____]. Insured has fully complied with all conditions of the Policy and respectfully requests that you reconsider your position based on the facts and authorities set forth below.

3.1 Factual Summary

3.1.1. On [DATE], Insured's [property / vehicle] sustained damage caused by [DESCRIBE COVERED PERIL].

3.1.2. Insured timely reported the loss on [DATE], completed all required forms, submitted a sworn proof of loss on [DATE] (or applicable date), and cooperated with the assigned adjuster, [NAME].

3.1.3. On [DATE], the insurer [denied the claim / paid only $______], asserting "[QUOTE INSURER'S STATED REASON]."

3.2 Why the Denial / Underpayment Is Incorrect

3.2.1. Coverage exists under the Policy. [QUOTE relevant insuring agreement and any limiting endorsement; explain why exclusion does not apply or has not been carried by the insurer's burden of proof.]

3.2.2. Cited exclusion does not apply. Under Maryland law, the insurer bears the burden of proving the applicability of an exclusion. See Bausch & Lomb Inc. v. Utica Mut. Ins. Co., 330 Md. 758 (1993). Here, [FACTS NEGATING EXCLUSION].

3.2.3. The valuation is incorrect. Insured's contractor / public adjuster / engineer estimates the actual cash value at $[AMOUNT] and the replacement cost at $[AMOUNT] (Exhibit __). The insurer's estimate omits or underprices: [ITEMS / TRADES / BUILDING CODE COMPLIANCE].

3.2.4. Concurrent or efficient proximate cause favors coverage. [Develop where applicable.]

3.3 Documents Submitted with This Appeal

☐ Independent estimate(s) and supporting photographs;

☐ Expert reports (engineering, building consultant, contents specialist);

☐ Receipts and invoices for repairs already performed;

☐ ALE / loss-of-use documentation;

☐ Witness statements;

☐ Other: [SPECIFY].

3.4 Request for Action

Insured requests that the insurer:

1. Review the additional documentation;

2. Issue a corrected coverage determination and supplemental payment within thirty (30) days of receipt of this letter;

3. Provide a written explanation citing specific policy language for any continued denial or partial payment, as required by Md. Code Ann., Ins. § 27-303(6); and

4. Identify and produce all documents in the claim file relevant to the denial, including any internal claim guidelines and expert reports relied upon.

Insured reserves all rights and remedies under the Policy and Maryland law, including filing a complaint with the Maryland Insurance Administration under Md. Code Ann., Ins. § 27-1001 and a civil action under Md. Code Ann., Cts. & Jud. Proc. § 3-1701 should this matter not be resolved.

Sincerely,

[________________________________]

[INSURED or COUNSEL NAME]

[ADDRESS / PHONE / EMAIL]

4. PART B — TIME-LIMITED DEMAND FOR PAYMENT

[VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AND EMAIL]

Date: [__/__/____]

[CLAIMS MANAGER]

[INSURER NAME]

[ADDRESS]

RE: TIME-LIMITED DEMAND FOR PAYMENT — POLICY NO. [____]; CLAIM NO. [____]

Dear Claims Manager:

Insured [NAME] demands payment of $[AMOUNT] in full and final satisfaction of the above-referenced first-party claim on or before [__/__/____] (the "Demand Deadline"). The Demand Deadline is [30 / 45] days from the date of this letter, which is a reasonable time within which to make payment based on the materials previously submitted, including the appeal letter dated [DATE].

The amount demanded is computed as follows:

If the insurer fails to pay the demanded sum by the Demand Deadline, Insured will:

1. File a complaint with the Maryland Insurance Administration under Md. Code Ann., Ins. § 27-1001;

2. Pursue all damages, expenses, attorney's fees (up to one-third of actual damages recovered under § 3-1701(d)), and interest available under Maryland law; and

3. Reserve the right to seek extra-contractual remedies for failure to act in good faith.

This letter is sent in good faith and in an effort to resolve this matter without litigation. Nothing herein waives any right or remedy of Insured.

Sincerely,

[________________________________]

[INSURED or COUNSEL NAME]

5. PART C — DEMAND FOR APPRAISAL UNDER § 27-605

[VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AND EMAIL]

Date: [__/__/____]

[CLAIMS MANAGER]

[INSURER NAME]

[ADDRESS]

RE: DEMAND FOR APPRAISAL — POLICY NO. [____]; CLAIM NO. [____]

Dear Claims Manager:

Pursuant to the Appraisal provision of the above-referenced Policy and Md. Code Ann., Ins. § 27-605, Insured [NAME] hereby invokes appraisal to resolve the dispute over the amount of loss for the claim arising from the [DATE OF LOSS] loss at [ADDRESS].

5.1. Insured names [APPRAISER NAME, CREDENTIALS] of [FIRM, ADDRESS] as Insured's competent and impartial appraiser.

5.2. Within twenty (20) days of this demand (or as required by the Policy), the insurer shall name its appraiser and the two appraisers shall select an umpire. If they cannot agree on an umpire within fifteen (15) days, either party may request that a Maryland Circuit Court judge appoint one.

5.3. This demand is limited to the amount of loss. Insured does NOT consent to appraisers deciding any coverage issue, causation issue, or interpretation of policy language. Such issues remain reserved for judicial / administrative determination.

5.4. The insurer's failure to participate in good faith in the appraisal will be treated as a breach of the Policy and as evidence of failure to act in good faith for purposes of Md. Code Ann., Cts. & Jud. Proc. § 3-1701.

Sincerely,

[________________________________]

[INSURED or COUNSEL NAME]

6. PART D — § 27-1001 COMPLAINT TO THE MIA

MARYLAND INSURANCE ADMINISTRATION

Property & Casualty Complaint Unit / § 27-1001 Filings

200 St. Paul Place, Suite 2700

Baltimore, MD 21202

Date: [__/__/____]

RE: COMPLAINT UNDER MD. CODE ANN., INS. § 27-1001 — FIRST-PARTY CLAIM DENIAL / UNDERPAYMENT

6.1 Statement of Facts

1. Complainant is the named insured under the above-referenced policy issued, sold, or delivered in Maryland.

2. On [__/__/____], Complainant suffered a covered loss: [DESCRIBE].

3. Complainant timely reported the loss, submitted a sworn proof of loss on [DATE], cooperated with the insurer's investigation, and otherwise satisfied all conditions precedent.

4. The insurer [denied the claim / paid only $______] on [__/__/____], citing "[QUOTE]."

5. The denial is contrary to the policy and the available evidence because [EXPLAIN].

6. Complainant submitted a written re-evaluation request on [DATE] (Exhibit __), to which the insurer [did not respond / responded by adhering to the denial].

7. Complainant [demanded appraisal under § 27-605 on (DATE) / did not pursue appraisal because the dispute concerns coverage rather than amount of loss].

6.2 Failure to Act in Good Faith — Specific Breaches

The insurer failed to act in good faith within the meaning of Md. Code Ann., Cts. & Jud. Proc. § 3-1701(a)(4) and Md. Code Ann., Ins. § 27-303 by, inter alia:

☐ Misrepresenting policy provisions or coverage applicable to the claim (Ins. § 27-303(1));

☐ Refusing to pay for an arbitrary or capricious reason based on all available information (Ins. § 27-303(2));

☐ Failing to settle promptly when liability was reasonably clear (Ins. § 27-303(5));

☐ Failing to provide a reasonable explanation of the basis for denial (Ins. § 27-303(6));

☐ Failing to conduct a reasonable, prompt, and thorough investigation;

☐ Relying on a one-sided or pretextual engineering / cause-and-origin / valuation report;

☐ Compelling Complainant to institute administrative or legal action to recover amounts plainly due (Ins. § 27-303(7));

☐ Other: [DESCRIBE].

6.3 Damages Sought

6.4 Documents Enclosed (Required by § 27-1001(b))

☐ Certified copy of the Policy (declarations and form), endorsements, and riders;

☐ All proofs of loss, sworn statements, and supporting documentation submitted to the insurer;

☐ All correspondence to and from the insurer regarding the claim;

☐ Estimates, invoices, photographs, expert reports, and receipts;

☐ Insurer's denial / partial-payment letter(s);

☐ Internal-appeal letter and any insurer response;

☐ Statement of actual damages and computation;

☐ § 27-1001 Complaint Information Sheet (MIA form).

6.5 Verification

I, [INSURED NAME], declare under the penalties of perjury that the foregoing § 27-1001 Complaint is true and correct to the best of my knowledge, information, and belief.

[________________________________]

[INSURED NAME]

Date: [__/__/____]

7. MARYLAND PRACTICE NOTES

• Exhaustion is mandatory. Md. Code Ann., Ins. § 27-1001 requires the insured to file a complaint with the Maryland Insurance Administration before bringing a § 3-1701 civil action. Failure to exhaust will result in dismissal absent a statutory exception (small-claim jurisdiction, written waiver, or commercial policy with applicable limit > $1,000,000).
• Internal appeal is optional but valuable. Most policies do not impose a mandatory internal-appeal step for property/casualty denials, but an internal re-evaluation request (Part A) may resolve disputes inexpensively and creates a record useful at the MIA.
• Time-limited demand letters. Maryland recognizes time-limited demands as evidence of refusal but Maryland's bad-faith remedy is statutory rather than common-law (cf. Georgia O.C.G.A. § 9-11-67.1). Demand letters should be tied to the § 27-1001 process rather than to threats of common-law tort recovery.
• Appraisal vs. coverage. Md. Code Ann., Ins. § 27-605 carves out appraisal from Maryland's general anti-arbitration rule. Appraisers may decide the amount of loss but not coverage, causation, or policy interpretation. Reserve coverage issues expressly when invoking appraisal.
• Suit limitation in policy. Many Maryland property policies impose a contractual suit-limitation period (often two or three years). The MIA filing tolls the limitations period under § 3-1701(d)(2)–(3); verify and diary carefully.
• Burden on exclusions. The insurer bears the burden of proof on policy exclusions. Bausch & Lomb Inc. v. Utica Mut. Ins. Co., 330 Md. 758, 625 A.2d 1021 (1993).
• Common-law bad faith generally unavailable. Allstate Ins. Co. v. Atwood, 319 Md. 247 (1990); Mesmer v. MAIF, 353 Md. 241 (1999). Plead breach of contract plus § 3-1701 statutory bad faith; do not plead a freestanding tort.
• MIA decision is appealable. A party aggrieved by the MIA's § 27-1001 decision has 30 days to request a contested-case hearing before the Office of Administrative Hearings. Final agency action is reviewable in Circuit Court.
• UM/UIM claims. First-party UM/UIM claims are within § 3-1701 / § 27-1001. Sequence appraisal/binding-arbitration provisions carefully; some UM clauses incorporate AAA arbitration that can interact with the MIA process.
• Removal risk. Diversity removal under 28 U.S.C. § 1332 is common where the insurer is non-Maryland and amount-in-controversy exceeds $75,000.

8. SOURCES AND REFERENCES

• Md. Code Ann., Ins. § 27-1001 — https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gin&section=27-1001
• Md. Code Ann., Cts. & Jud. Proc. § 3-1701 — https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gcj&section=3-1701
• Md. Code Ann., Ins. § 27-303 (Unfair Claim Settlement Practices) — https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gin&section=27-303
• Md. Code Ann., Ins. § 27-605 (Appraisal) — https://codes.findlaw.com/md/insurance/md-code-ins-sect-27-605.html
• Maryland Insurance Administration — Insurer Good Faith Requirements: https://insurance.maryland.gov/Pages/insurer-good-faith-requirements.aspx
• MIA — A Guide for Consumers Filing a § 27-1001 Civil Complaint: https://insurance.maryland.gov/Consumer/Documents/27-1001Guide.pdf
• MIA — § 27-1001 Complaint Information Sheet: https://insurance.maryland.gov/Consumer/Documents/27-1001-Complaint-Information-Sheet-form.pdf
• MIA — Determining Coverage / Settling a Claim: https://insurance.maryland.gov/Consumer/Documents/publicnew/DETERMINING-COVERAGE.pdf
• MIA — Appeals and Grievances: https://insurance.maryland.gov/Consumer/pages/appealsandgrievances.aspx
• Allstate Ins. Co. v. Atwood, 319 Md. 247, 572 A.2d 154 (1990)
• Mesmer v. Maryland Auto. Ins. Fund, 353 Md. 241, 725 A.2d 1053 (1999)
• Bausch & Lomb Inc. v. Utica Mut. Ins. Co., 330 Md. 758, 625 A.2d 1021 (1993)
• COMAR 31.15.07 (MIA implementing regulations)

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. Maryland's bad-faith remedy is statutory and requires strict compliance with the § 27-1001 administrative process before suit; failure to exhaust is fatal to the bad-faith claim. Consult a Maryland-licensed attorney before sending any demand letter or filing any complaint.