A personal injury demand letter serves as a single point purpose in a personal injury claim i.e. to get the ball rolling on negotiations. In this demand letter, which is the main focus of the negotiation process, the injured person needs to propose their strongest arguments to the insurance company. This need to include:
- The reason the other party is legally responsible
- The injuries the injured person faced and currently faces
- The information about medical treatment and how much it costs
- The income loss
- Any other damages suffered
In conclusion, the letter calls on the insurance company to offer a lump sum in order to settle the claim. But it can be quite a tricky procedure to understand the demand letter process. This is because most people aren’t used to filing personal injury insurance claims. Usually, an injured person or their personal injury attorney will send the demand letter to the insurance company of the business or person who is responsible for causing the injury or the accident that resulted in the injury. Apart from presenting the injured person’s side of the case, the letter also establishes how the injures occurred, information about those injuries, details of the treatment for those injuries and how those injuries have impacted the claimant. There is also a specific ‘demand,’ or a dollar amount in the letter, that the injured person is willing to accept to successfully resolve the case and no longer hold the other party liable.
Next Steps
After the demand letter is sent, any of the following things may occur:
- The demand may be accepted by the insurance company, and the settlement may proceed
In this case, you may receive the compensation that you asked for in the demand letter. In exchange, you may be required to sign a release of liability. Usually, this does not happen without some negotiation on the part of the insurance company.
- The insurance company may make a counter-offer
In this case, the injured party will have to consult with their personal injury lawyer to decide whether they want to accept the counter-offer made by the insurance company, re-negotiate or file a lawsuit. Once a demand letter is sent, it triggers a back-and-forth process, wherein the injured person asks for an inflated amount and the insurance company offers a much lower amount. Through negotiations, both parties settle on an amount that is somewhere in the middle.
- The claim may be denied outright by the insurance company and they may refuse to pay anything
It is an extremely rare occurrence for an insurance company to deny a claim. The mandate for most insurance companies is to settle a claim before it gets to court. Only in instances when the claim is not supported by any evidence, that a denial occurs. This usually happens when he injured person has does not have any record of treatment or can offer not one medical bill that they had to pay or have to pay.
