Wisconsin First-Party Insurance Claim Denial Appeal

FIRST-PARTY INSURANCE CLAIM DENIAL APPEAL — WISCONSIN

TABLE OF CONTENTS

1. Letter Header and Delivery
2. Subject and Reference Block
3. Statement of Appeal and Time-Limited Demand
4. The Insured, Policy, and Loss
5. Notice and Cooperation
6. The Denial and Why It Is Wrong
7. Demand for Payment in Full
8. Demand for Appraisal (Amount-of-Loss Disputes)
9. Wis. Stat. § 628.46 12% Statutory Interest
10. Wis. Admin. Code Ins 6.11 Claim-Handling Demands
11. Notice of Bad Faith and Reservation of Rights
12. OCI Complaint Companion
13. Exhibit Index
14. Signature
15. Wisconsin Practice Notes
16. Sources and References

1. LETTER HEADER AND DELIVERY

[INSURED'S COUNSEL FIRM NAME]

[STREET ADDRESS]

[CITY, WI ZIP]

Phone: [NUMBER] Email: [EMAIL]

Date: [DATE]

VIA CERTIFIED MAIL — RETURN RECEIPT REQUESTED

VIA EMAIL: [ADJUSTER EMAIL]

VIA FAX: [CLAIMS UNIT FAX]

[INSURER LEGAL NAME]

Attn: Claims Department / Quality Review

[CLAIMS UNIT ADDRESS]

cc: [ADJUSTER NAME], Adjuster

cc: Wisconsin Office of the Commissioner of Insurance (parallel filing)

2. SUBJECT AND REFERENCE BLOCK

RE: APPEAL OF CLAIM DENIAL / UNDERPAYMENT — TIME-LIMITED DEMAND

3. STATEMENT OF APPEAL AND TIME-LIMITED DEMAND

This letter is a formal pre-litigation appeal of the adverse claim determination dated [DATE] (the "Denial") under Policy No. [NUMBER]. The Denial is contrary to the Policy's terms, applicable Wisconsin insurance law, and the evidence. [INSURED] demands that [INSURER] reverse the Denial and pay the full amount due, with statutory interest, on or before [DEADLINE DATE]. Failure to do so will result in (i) suit in Wisconsin Circuit Court for breach of contract and the common-law tort of bad faith recognized in Anderson v. Continental Ins. Co., 85 Wis. 2d 675 (1978); (ii) accrual of 12% simple interest under Wis. Stat. § 628.46; (iii) demand for punitive damages under Wis. Stat. § 895.043; and (iv) a consumer complaint with the Wisconsin Office of the Commissioner of Insurance ("OCI").

4. THE INSURED, POLICY, AND LOSS

4.1. Insured: [INSURED FULL NAME], residing at [ADDRESS].

4.2. Policy: Policy No. [NUMBER] issued by [INSURER] with effective dates [__/__/____] to [__/__/____], providing [describe coverages — Coverage A dwelling $[AMT]; Coverage B other structures $[AMT]; Coverage C personal property $[AMT]; Coverage D loss of use $[AMT]; deductible $[AMT]]. The Policy was in full force on the date of loss.

4.3. Loss: On [DATE] at [ADDRESS], [INSURED] sustained a covered loss caused by [CAUSE — e.g., wind, hail, fire, water] (the "Loss"). The Loss is described in detail in the attached Sworn Proof of Loss (Exhibit A), photographs (Exhibit B), and contractor estimate (Exhibit C).

4.4. Amount of Loss: Replacement cost / actual cash value of the Loss is $[AMOUNT] based on [BASIS — independent estimate by ________; Xactimate scope; appraisal].

5. NOTICE AND COOPERATION

5.1. [INSURED] notified [INSURER] of the Loss on [DATE] by [telephone/online/written notice] within the time required by the Policy and by Wis. Stat. § 631.81.

5.2. [INSURED] submitted a Sworn Proof of Loss on [DATE] stating the amount of loss as $[AMOUNT] (Exhibit A), satisfying the conditions of the Policy.

5.3. [INSURED] has fully cooperated with [INSURER], including by [examined under oath / produced documents / permitted inspection].

5.4. By no later than [DATE], [INSURER] received written notice of (a) the existence of a covered loss and (b) the amount of loss within the meaning of Wis. Stat. § 628.46.

6. THE DENIAL AND WHY IT IS WRONG

6.1. [INSURER]'s letter dated [DATE] stated: [QUOTE INSURER'S DENIAL/UNDERPAYMENT LANGUAGE].

6.2. The stated reason fails as a matter of law and fact:

• ☐ Misapplication of exclusion. The cited exclusion [CITE] does not apply because [FACTS]. Wisconsin construes exclusions narrowly against the insurer. Folkman v. Quamme, 2003 WI 116.
• ☐ Causation error. The covered cause is the efficient proximate cause; any concurrent uncovered cause does not defeat coverage where the policy lacks an enforceable anti-concurrent-causation clause under Wisconsin law.
• ☐ Improper depreciation / undervaluation. [INSURER] improperly depreciated [items] and applied [ACV vs. RCV] contrary to policy terms.
• ☐ Late-notice defense fails. Wisconsin's late-notice rule requires the insurer to demonstrate prejudice. Wis. Stat. § 631.81(1). [INSURER] has not shown prejudice.
• ☐ Breach of duty to investigate. [INSURER]'s "investigation" consisted of [describe deficiency — drive-by inspection; reliance on outdated photographs; refusal to retain a qualified expert; ignoring contractor estimate].
• ☐ Cherry-picked engineer/IME report. [INSURER] relied on [VENDOR], a known preferred-vendor whose conclusions were predetermined.
• ☐ Conflict with adjuster's own field notes. [INSURER]'s own field adjuster valued the loss at $[AMT], but the home office adjusted that figure downward without a reasonable basis.

6.3. The Loss is a covered loss; the amount due is not less than $[AMOUNT], less the $[DEDUCTIBLE] deductible and any prior payments of $[AMOUNT] = $[NET DUE].

7. DEMAND FOR PAYMENT IN FULL

7.1. [INSURED] demands payment of $[NET DUE] on or before [DEADLINE], plus accrued 12% simple interest under Wis. Stat. § 628.46 from [DATE 30 DAYS AFTER NOTICE].

7.2. Payment shall be made by [wire / check] to [PAYEE] at [ACCOUNT/ADDRESS].

7.3. [INSURED] is willing to provide reasonable additional documentation, but only on a clearly identified, time-limited basis. Open-ended document requests, repeated examinations under oath, and serial reservations of rights are not permitted as a substitute for a coverage decision.

8. DEMAND FOR APPRAISAL (AMOUNT-OF-LOSS DISPUTES)

8.1. To the extent the parties disagree on the amount of loss (not the existence of coverage), [INSURED] hereby invokes the appraisal clause of the Policy. Quoted clause: [QUOTE APPRAISAL LANGUAGE].

8.2. [INSURED] designates [APPRAISER NAME, CREDENTIALS] as Insured's appraiser. Address: [___]. Telephone: [___]. Email: [___].

8.3. [INSURER] must designate its appraiser within [NUMBER] days as required by the Policy. The two appraisers shall select an umpire, or upon failure to agree, [INSURED] will petition the Wisconsin Circuit Court for the appointment of an umpire under the Policy and Wis. Stat. ch. 788 (arbitration analog).

8.4. Invocation of appraisal does not waive any coverage defense or any of [INSURED]'s rights, including the right to pursue bad faith and § 628.46 interest. See Farmers Auto. Ins. Ass'n v. Union Pac. Ry., 2009 WI 73.

9. WIS. STAT. § 628.46 12% STATUTORY INTEREST

9.1. Statute. Wis. Stat. § 628.46(1): "an insurer shall promptly pay every insurance claim. A claim shall be overdue if not paid within 30 days after the insurer is furnished written notice of the fact of a covered loss and of the amount of the loss. ... All overdue payments shall bear simple interest at the rate of 12 percent per year."

9.2. Notice date. Written notice of the fact of a covered loss and the amount of loss was furnished to [INSURER] on [NOTICE DATE] (Exhibit A and certified-mail receipt at Exhibit D).

9.3. Interest accrual. The claim became overdue on [NOTICE DATE + 30]. Twelve percent (12%) simple interest accrues on the unpaid balance from that date until paid in full.

9.4. Running calculation.

9.5. No "reasonable proof" defense. Section 628.46(2)'s exception applies only where the insurer has "reasonable proof to establish that the insurer is not responsible for the payment." [INSURER] has no such proof, as detailed in Section 6 above.

9.6. Interest is in addition to common-law prejudgment interest, costs, and any bad-faith damages.

10. WIS. ADMIN. CODE INS 6.11 CLAIM-HANDLING DEMANDS

10.1. Pursuant to Wis. Admin. Code Ins 6.11, [INSURED] demands that [INSURER]:

• Conduct a complete, fair, and prompt investigation of the claim;
• Affirm or deny coverage within a reasonable time after proof of loss;
• Provide a reasonable explanation, in writing, of the basis for any denial or compromise offer;
• Refrain from misrepresenting policy provisions;
• Refrain from compelling [INSURED] to institute litigation by offering substantially less than the amount ultimately recoverable;
• Promptly settle one portion of the claim where liability is clear, even if other portions remain in dispute.

10.2. Failure to comply will be reported to OCI as a violation of Ins 6.11 and will be cited as evidence of bad faith under Anderson.

11. NOTICE OF BAD FAITH AND RESERVATION OF RIGHTS

11.1. This letter is NOTICE OF POTENTIAL BAD FAITH under Anderson v. Continental Ins. Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978). If [INSURER] fails to reverse the Denial and pay the amounts owed by the deadline above, [INSURED] will bring an action including:

• Count I — Breach of Contract under the Policy;
• Count II — Common-Law Bad Faith (Anderson tort), seeking compensatory damages, attorneys' fees as compensatory damages under DeChant v. Monarch Life Ins. Co., 200 Wis. 2d 559 (1996), and punitive damages under Wis. Stat. § 895.043 (greater of 2x compensatory or $200,000);
• Count III — Statutory Interest under Wis. Stat. § 628.46;
• Count IV — Declaratory Judgment under Wis. Stat. § 806.04.

11.2. [INSURED] expressly reserves all rights, including the right to amend or supplement this demand, to demand additional documentation, to invoke arbitration if applicable, to pursue all available statutory and common-law remedies, and to seek pre- and post-judgment interest at the maximum lawful rate.

11.3. Litigation hold. [INSURER] is on notice to preserve all claim-handling materials, including (a) the entire claim file in native electronic format with metadata, (b) all internal emails, instant messages, and adjuster notes, (c) reserves and reserve change history, (d) audio recordings of recorded statements and calls, (e) all vendor reports and communications, (f) underwriting file, and (g) reinsurance communications. Spoliation will be pursued by motion.

12. OCI COMPLAINT COMPANION

☐ Filed concurrently on [__/__/____] — Confirmation #: [_______]

OCI complaint should attach: (i) consumer complaint form, (ii) the Policy, (iii) Sworn Proof of Loss, (iv) Denial letter, (v) this demand letter, (vi) timeline of communications.

13. EXHIBIT INDEX

14. SIGNATURE

Respectfully submitted,

[________________________________]

[ATTORNEY NAME], State Bar of Wisconsin No. [####]

[FIRM NAME]

Attorney for [INSURED NAME]

cc: [INSURED]

cc: Wisconsin OCI (parallel filing)

cc: [MORTGAGEE / LIENHOLDER, if applicable]

15. WISCONSIN PRACTICE NOTES

• Section 628.46 12% simple interest is the centerpiece. The interest is mandatory once the conditions are met: (i) written notice of (a) covered loss and (b) amount of loss, (ii) 30 days have elapsed, and (iii) the insurer lacks reasonable proof it is not responsible. Plead it as a stand-alone count and include a running calculation in every demand.
• § 628.46 does NOT apply to settlement payments under a settled disputed claim — it applies to insurance "claims" themselves. Kontowicz v. American Standard Ins. Co., 2006 WI 67. Frame demands accordingly.
• No private right of action under § 628.34. Unfair Marketing Practices is OCI-enforced only. NAACP v. American Family Mut. Ins. Co., 978 F.2d 287 (7th Cir. 1992).
• Anderson tort and Brethorst prerequisite. The first-party bad-faith tort exists, but the insured must plead breach of contract as a prerequisite. Brethorst v. Allstate Prop. & Cas. Ins. Co., 2011 WI 41. Discovery on bad faith is gated by a contract showing.
• Late notice requires prejudice. Wis. Stat. § 631.81(1) (and Neff v. Pierzina, 2001 WI 95) require the insurer to prove prejudice from late notice. Do not concede the policy's notice condition without a prejudice analysis.
• Standard fire policy / appraisal. Wisconsin's standard fire policy provisions (Wis. Stat. § 632.08) include an appraisal clause for amount-of-loss disputes. Most homeowners and auto policies include a parallel clause. Appraisal is binding as to amount of loss only; coverage and bad-faith claims survive.
• Anti-concurrent-causation and efficient proximate cause. Wisconsin's treatment of ACC clauses is fact-specific. Assess the policy language carefully before conceding causation.
• Statute of limitations. Wis. Stat. § 631.83(1) provides a 3-year limit on fire-policy actions and a 6-year limit on most other property-casualty contract actions (§ 893.43), but the policy may shorten — read it. Limitations is tolled during appraisal/arbitration. Wis. Stat. § 631.83(3).
• DeChant fees as compensatory damages. Attorneys' fees incurred to obtain policy benefits are recoverable as compensatory damages on the Anderson tort. Maintain segregated time entries from the start.
• Punitive damages cap. Wis. Stat. § 895.043(6): greater of 2x compensatory damages or $200,000.
• OCI complaint is meaningful pressure. OCI cannot order payment but it can find regulatory violations, refer to enforcement, and create a paper trail. Insurers respond to OCI inquiries, often quickly. File the complaint in parallel with this demand.

16. SOURCES AND REFERENCES

• Wis. Stat. § 628.46 (Timely payment of claims) — https://docs.legis.wisconsin.gov/document/statutes/628.46
• Wis. Stat. § 628.34 (Unfair marketing practices) — https://docs.legis.wisconsin.gov/document/statutes/628.34
• Wis. Stat. § 631.81 (Notice / proof of loss; prejudice) — https://docs.legis.wisconsin.gov/document/statutes/631.81
• Wis. Stat. § 631.83 (Limitations) — https://docs.legis.wisconsin.gov/document/statutes/631.83
• Wis. Stat. § 632.05 (Property indemnity) — https://docs.legis.wisconsin.gov/document/statutes/632.05
• Wis. Stat. § 632.08 (Standard fire policy) — https://docs.legis.wisconsin.gov/document/statutes/632.08
• Wis. Stat. § 895.043 (Punitive damages) — https://docs.legis.wisconsin.gov/document/statutes/895.043
• Wis. Admin. Code Ins 6.11 (Claim settlement practices) — https://docs.legis.wisconsin.gov/code/admin_code/ins/6/11
• Wisconsin OCI Consumer Complaint Portal — https://oci.wi.gov/Pages/Consumers/FileAComplaint.aspx
• Anderson v. Continental Ins. Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978) — https://law.justia.com/cases/wisconsin/supreme-court/1978/76-242-7.html
• Brethorst v. Allstate Prop. & Cas. Ins. Co., 2011 WI 41
• DeChant v. Monarch Life Ins. Co., 200 Wis. 2d 559 (1996)
• Kontowicz v. American Standard Ins. Co., 2006 WI 67
• Folkman v. Quamme, 2003 WI 116
• NAACP v. American Family Mut. Ins. Co., 978 F.2d 287 (7th Cir. 1992)
• Wis JI-Civil 2761 (Bad Faith Insurer's Refusal to Pay) — https://wilawlibrary.gov/jury/files/civil/2761.pdf

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. An attorney licensed in Wisconsin must review and customize this document before use. Statutes, case law, and court rules change; verify all authorities before relying on them.