A demand letter is a letter to the defendant’s insurance company outlining your strongest arguments about why your case should be resolved promptly, and for how much. The insurance company will evaluate the information in your letter against the information it has gathered through its internal investigation and, typically, respond with a counter-offer.
In this post, our experienced Vancouver injury attorneys will explain how to maximize your personal injury settlement with a persuasive demand letter.
What is the Purpose of a Demand Letter?
A well-crafted demand letter is a strategic step toward resolution of your case. It shows the defendant not only the strength of your case, but also the real downside risks to not resolving it promptly. A response, or lack of a response, will allow you to gauge whether the defendant and its insurance company are ready to have a good-faith settlement discussion or if you need to move to the next step in the litigation (e.g., filing a lawsuit, engaging experts, or preparing for trial).
The key elements of an effective demand letter are good timing, detailed content and, of course, a reasonable demand.
Timing: When Should You Send A Demand Letter?
If there are few disputed facts in your case, and your injuries are fully known, your attorney may recommend sending a demand letter before you even file a lawsuit, to keep expenses low and maximize your recovery. On the other hand, if you are still undergoing medical treatment, your attorney may advise you to wait until the full extent of your injuries is known and the need for future treatment is assessed. Your attorney’s prior experience with your insurance company and the particulars of your insurance policy (e.g., policy limits) may also influence the timing of the letter.
Content: How Much Detail Should Be Included In The Demand Letter?
A demand letter demonstrates to the insurance company why it should pay you the amount you seek now, in settlement of your claim, rather than forge ahead through a lawsuit and trial. Accordingly, an effective demand letter typically includes the following elements:
- A clear, concise statement of the facts: A strong demand letter highlights the most favorable facts of your case. Early on, there is rarely an incentive to discuss potential weaknesses. However, as the case progresses, it may be important to show the insurance company that you understand the potential shortcomings in your case and address them head-on.
- An analysis of the legal issues: Although not always necessary, references to favorable case law may strengthen your demand letter and demonstrate to the insurance carrier that your lawyer has a solid command of the potential legal issues raised by the facts of your case.
- A careful evaluation of damages: In legal terms, your “damages” represent all the harm done to you by the defendant’s careless act. Legal damages include all past and anticipated future medical costs; all past and anticipated future wage losses; and an amount for the pain and suffering you have endured as a result of your injuries.
- Supporting documents: Wherever possible, your lawyer will back up your claims with tangible evidence, such as medical records, medical bills, W2s, and any other document that proves your damages, helps to establish the defendant’s liability, and strengthens your credibility.
- Your attorney’s prior verdicts: Insurance companies evaluate risk. A brief section in your demand letter that highlights your attorney’s prior successes (jury verdicts or settlements) not only signals your attorney’s willingness to try the case if the insurance company does not engage in good faith negotiations, but also provides a strong indicator of the insurance company’s risk in your case.
- A deadline by which to respond: Setting a deadline encourages a prompt response from a busy insurance claims adjuster. If the insurance company fails to respond, your demand will automatically expire and you may later send an adjusted demand that accounts for increased costs and newly discovered facts as the case progresses.
Amount: How Much Should You Demand?
Your demand should be high enough to give you room to negotiate, but not so high that you lose credibility. An excessive demand will lead only to an inappropriately and frustratingly low counter-offer, if any. It will also force you, if you want to settle, to drop your demand significantly. Sending a high, but reasonable, demand, that is backed by objective evidence (medical bills and other documentation), tells the insurance company that you believe in your case, that you want full value, and that you are willing to negotiate accordingly. Our Vancouver injury attorneys can help you formulate an appropriate demand based on our experience in handling personal injury cases, generally, and working with your insurance company, in particular.
If you have been injured in an accident, and you would like to obtain a prompt and fair personal injury settlement, please call us or complete the contact form on this page. We will be happy to review your situation and explain how our Vancouver injury attorneys can help you craft a compelling demand letter.