Your business files a claim after a fire, a burst pipe or a break-in, expecting the policy to cover the loss. Instead, the check that arrives falls thousands of dollars short of what repairs and lost income actually cost. A lowball payment can feel final, but it rarely is. Maryland law gives policyholders several ways to push back and pursue the full amount the policy promises.
Common reasons for an underpaid claim
Underpayment often starts with how the insurer values the loss. An adjuster may lean on outdated cost estimates, overlook hidden structural damage or apply depreciation more aggressively than the policy allows.
Fights over what counts as covered business interruption are common too. Pinning down why the number came in low is your first step. It tells you whether the gap comes from a factual disagreement or a coverage question you can challenge.
The appraisal clause in many commercial policies
Most commercial property policies include an appraisal provision, a built-in tool for settling honest disagreements about the dollar value of a loss. Either side can demand appraisal, and each party hires its own appraiser. Those two appraisers then choose a neutral umpire, and any figure that two of the three agree on sets the amount
Appraisal settles disputes over how much the damage is worth, not whether the policy covers the loss at all. When the shortfall is large or coverage itself is in question, resolving a coverage dispute may call for steps beyond appraisal.
Maryland’s good-faith duty for insurers
Maryland requires insurers to handle first-party claims in good faith, meaning decisions must rest on honesty and diligence, not guesswork. When an insurer breaks the policy and falls short of that standard, state law lets a policyholder pursue more than the unpaid balance.
Before heading to court, though, you generally must go through the state complaint process with the Maryland Insurance Administration (MIA), the agency that regulates insurers here. If the review finds bad faith, a business may seek enhanced damages that can include litigation costs, reasonable attorney fees and interest on money the insurer withheld.
Your options after a lowball offer
The right response depends on the size of the gap and what your policy allows. A modest difference over the cost of repairs may suit appraisal, while a denial rooted in how the insurer read your coverage often points toward a legal claim.
Deadlines apply to both routes. The sooner you compare the insurer’s payment notice with the policy language, the more room you have to act. Solid records of the loss and every exchange with the adjuster give your business its strongest footing if the fight escalates.