When you’re injured in an auto accident, you ultimately will need a “demand letter” to claim payments for your losses. Such letters lay out the nature of the accident, the ensuing medical costs and your expectations for a settlement which can avoid litigation.
Most personal injury insurance claims are then settled out of court, with no need for a lawsuit. But victims need an injury attorney to handle the details, including organizing and composing the demand letter that is sent to insurance companies, and then negotiating with insurers to gain victims a fair settlement.
As for what a demand letter says, it can open by stating that it is a “good faith” attempt to resolve an insurance claim without need of litigation. The demand letter should present the evidence and facts of liability and details about the nature and extent of injuries, physical impairments, lost wages and other damages.
The demand letter then should demand a specific amount which you and your attorney determine is the cost and the worth of your injury. This amount may be stated in the letter as a demand for “no less than” than the amount you and your attorney specify.
Demand letters typically are sent to an insurance company after the victim has concluded medical treatment and exact figures are available on what his or her full treatment cost. In short, the demand letter should include all treatments — not just an initial emergency room visit, but also primary care from personal physicians and other costs.
The important thing is to make sure you have all of the information at hand to convey damages to the insurance company, which otherwise may try to settle for a far lower amount than you deserve. If a person accepts an insurance settlement only for their emergency room visit, they may shortchange themselves.
After receiving a demand letter, insurance companies then have a “window” to respond. An insurer or insurance adjuster customarily takes 30 to 45 days to respond with an offer to settle the claim. An adjuster also may ask for supplemental details, such as the amounts that health insurance already may have paid and a victim’s history in prior accidents.
The victim and his or her injury attorney then can assess the insurer’s response to the demand letter and accept it or, as in most cases, present a counter offer.
Injury attorneys advise victims never to accept an insurer’s first offer, which is highly unlikely to be their best offer. Instead they should negotiate — or, rather, let their attorneys negotiate for them.
Normally such negotiations will succeed in resolving a case via an out-of-court settlement for the client. In the minority of cases when that does not occur, the client has the option of seeking a more favorable resolution through litigation.
A demand letter isn’t the first contact made with an insurer. Other things precede a demand letter, such as victims making initial contact with their insurers to alert them about the injury accident.
Victims then are advised to engage an injury attorney who will notify insurers of the costs of the injury so the insurers can set their reserves — an accounting procedure — for such amounts. Then, throughout medical treatment, an adjuster may call to inquire about a victim’s treatment status in order to update and revise the setting of reserves.
When medical treatment has concluded, the victim’s injury attorney sends a demand letter to the insurer specifying all facts in the case and asserting the payment amount needed to cover damages.
You may wonder if, as a victim, you should send the demand letter yourself. But facts are facts: Insurance companies will not offer as much to individuals as they would to an attorney when facing possible litigation. Also, statistically injury attorneys are able to get two to three times as much money in a settlement than would an individual acting alone.
When an insurance company makes a bad low-ball offer to an individual, that person can protest, but he or she will be up against the insurance company’s defense attorneys. Victims are better advised to engage an injury attorney who can fight for their legal rights, including writing a demand letter and negotiating a settlement.