Demand Letter

A formal pre-suit written notice to the defendant or insurer outlining the claim, documenting losses, and demanding a specific settlement amount — the opening move in negotiations.

Demand Letter in Personal Injury Cases

The demand letter is the primary tool for resolving personal injury claims without litigation — most cases settle at the demand letter stage or through follow-on negotiations, never reaching the courthouse.

A well-drafted personal injury demand letter typically includes:

Liability section. A description of the accident — date, location, circumstances, and the defendant's negligent conduct. Supporting documentation: the police report, witness statements, photographs, and any applicable citations or violations.

Injury and medical treatment section. A detailed description of the plaintiff's injuries, the medical providers who treated them, the course of treatment, current condition, and prognosis. All medical records and bills are organized and attached. The letter explains how the injuries have affected daily life, work, and activities.

Damages section. An itemized list of all damages claimed: past medical expenses (with attached bills), future medical expenses (if ongoing treatment is needed), past lost wages (with supporting documentation), future earning capacity loss (if applicable), and non-economic damages for pain and suffering.

Demand figure. A specific dollar amount demanded to resolve the claim. The demand is typically set higher than the expected settlement to provide negotiating room. The demand must be reasonable and supportable — an extreme demand invites the insurer to dig in rather than negotiate.

Response deadline. A deadline by which the insurer must respond — typically 30 days. The deadline signals that a lawsuit will be filed if the case is not resolved.

Timing matters. The demand letter is typically sent after the plaintiff has reached maximum medical improvement — or at least has a clear picture of the full extent of injuries and damages. Sending too early, before treatment is complete, risks undervaluing the claim.

How Demand Letter Works in Practice

Insurance companies process hundreds of demands per adjuster. A demand letter lands in a claim file and is evaluated based on: liability exposure (how clear is the defendant's fault?), coverage (what are the policy limits?), damages documentation (are the bills and records complete and organized?), and venue risk (what would a jury in this county likely award?).

The insurer's initial response is often a counteroffer well below the demand. Negotiation then proceeds through phone calls, counter-offers, and additional documentation. The range between the initial demand and the eventual settlement can be wide — particularly for non-economic damages, where the parties have more room to negotiate.

Policy limits are a practical ceiling. If the at-fault driver has a $50,000 bodily injury policy, the insurer's maximum exposure from that policy is $50,000. In policy-limits demands, the letter specifically demands the full policy limits within a set time, creating the possibility of a bad faith claim if the insurer fails to settle within limits when a jury verdict could expose the insured to a greater judgment.

The demand letter does not toll the statute of limitations. A claimant who relies on demand letter negotiations without filing suit before the deadline will lose the right to sue regardless of how far negotiations progressed.

State-by-State Variations

The demand letter is a universal pre-litigation tool in personal injury practice across all states. The primary variations concern the formal requirements for demands in specific contexts:

Government tort claims (required in California and most other states before suing a government entity) are a specialized form of demand with strict timing and content requirements. California's six-month deadline is among the stricter in the country.

Many states have statutes addressing policy-limits demands specifically — setting rules for when an insurer must accept a within-limits settlement demand to avoid exposure to excess verdicts. California's bad faith law governs this area under Insurance Code section 790.03.

Some states require notice-of-claim letters for specific types of cases — such as slip-and-fall claims against retailers in Georgia, or construction defect claims under various state statutes — as a condition of filing suit.

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