What is a Demand Letter?

personal injury | September 13, 2021

Anytime a person is injured due to the careless or negligent actions of someone else, they should be able to recover compensation either through a settlement with insurance carriers or as a result of a successful personal injury lawsuit. This process can be challenging, and it often begins with back and forth with insurance carriers. A demand letter is one of the initial stages of securing compensation for a personal injury claim. Here, we want to discuss what a demand letter is, what is contained inside of a demand letter, and whether or not you need an experienced personal injury attorney to handle this process.

What is a Demand Letter?

A Demand Letter in a California Personal Injury Case

A demand letter is going to be one of the first things sent out to insurance carriers after an injury occurs. This is part of the process of securing compensation for an injury caused by the actions of another party. An injury victim and their attorney will need to first gain an understanding of the total losses resulting from the incident. This will include all medical bills, property damage expenses, out-of-pocket expenses, pain and suffering damages, and more.

Demand letters will be clear and concise, and they need to be written professionally. If a personal injury victim is not working with an attorney, they should consider doing so because an attorney will understand exactly what needs to be contained in a demand letter. Most demand letters include all of the following information:

  • A summary of the incident
  • The facts surrounding the case
  • A description of all the injuries and treatment
  • Information about expected future medical care
  • Copies of all medical bills
  • Proof of any other types of losses, including lost income, receipts for out-of-pocket expenses, etc.

The demand letter will also make sure that the defendant in the case knows exactly how much compensation is being requested. An injury victim or their attorney will indicate a clear date about when a response is expected by, along with concluding the letter by letting the defendant know that a lawsuit could be forthcoming if the demand amount is not met.

How Will an Insurance Carrier Respond to the Demand Letter?

Insurance carriers and at-fault parties may respond in various ways after receiving these letters. In general, we will see that there are three typical responses to a demand letter:

An Accepted Demand

In rare circumstances, a demand letter amount will be met, and the insurance carrier will pay. Insurance carriers do not like to pay full amounts for claims, so it is unlikely that they will immediately accept the demand.

A Counteroffer

What is more likely to happen is that the insurance carrier will counter the initial demand with another offer in response. Typically, a counteroffer will be much lower than the initial demand. However, this does not mean that the counteroffer has to be accepted. In fact, this should be the starting point of negotiating towards a higher amount.

A Denial of the Demand

In some situations, an insurance carrier or at-fault party could deny a demand letter. In these cases, it may be necessary for an injury victim and their attorney to file a civil lawsuit in order to continue the claim and recover compensation.

It is incredibly important to have an accident attorney help with these claims. A demand letter can set the tone for an entire injury case, and it can put insurance carriers on notice that you mean business and expect compensation.