What is a Demand Letter and Why Should I Have an Attorney Draft One After an Accident?

The plaintiff in a personal injury lawsuit is the party who was injured. However, long before a lawsuit is filed, most personal injury cases involve a demand letter to the insurance company. The insurance company for the at-fault party generally handles negotiations for settlement of injury claims. 

Demand letters are used in many personal injury cases. Attorneys draft demand letters for medical malpractice, auto accidents, product liability, premises liability, and many other claims. A well-crafted demand letter could avoid a lawsuit. Individuals should be careful about writing a settlement demand letter without an attorney’s help.

Two Important Facts About Demand Letters to Insurance Companies

There are two essential facts about demand letters that every victim should know.

The statements in a demand letter could hurt your case. If you file a lawsuit and your case goes to trial, any comments you made in your letter could be used against you. 

For example, when describing the accident, you stated you were in a hurry to pick up your children. The defense could argue that you were distracted and in a rush, which contributed to the cause of the accident.

The amount of money you receive could be lower than the value of your claim because of Florida’s comparative fault. The compensation you receive is reduced by the percentage of fault assigned to you for causing the accident. Having a personal injury attorney draft the demand letter can avoid making mistakes that could cost you thousands of dollars. 

Demand letters could end your claim. If you and the insurance company agree to a settlement amount, you must sign a settlement agreement before receiving the money. The settlement agreement is a binding legal contract.

When you sign a settlement agreement, your personal injury claim ends. The agreement releases all parties from all claims arising from the accident or your injuries. You cannot ask for more money or file a lawsuit, even if you discover additional claims or damages. 

What is Included in a Demand Letter?

A demand letter includes basic elements that provide the insurance company with sufficient information to decide how to proceed with the claim. The purpose of the demand letter is to convince the insurance company to pay the claim. It is also designed to maximize the value of your damages to get the most money possible for your personal injury claim. 

A demand letter to the insurance company typically includes sections related to:

  • An explanation of the facts of the case and how the accident resulted in your injuries
  • Discussion of how the at-fault party is legally responsible for compensating for your damages
  • A detailed description of your injuries, impairments, and disabilities
  • A description of the medical care required to treat your injuries, including surgeries, medications, and therapies
  • A detailed accounting of the medical costs for your medical treatment, including out-of-pocket expenses for medications, co-pays, medical supplies, and medical equipment
  • A statement from your physician explaining the extent of your injuries, permanent impairments, and any ongoing care or treatment that is necessary
  • Accounting of our loss of income, including wages, commissions, salaries, bonuses, and benefits
  • Description of the pain and suffering you experienced because of your injuries
  • Supporting documentation and evidence to support your allegations of fault and damages
  • A dollar amount that you agree to accept in settlement of your personal injury claim

The insurance company may agree to pay your claim. It could also deny liability for your claim, thereby leaving you little choice but to file a personal injury lawsuit if you want to pursue legal action against the party who caused your injury.

In many cases, the insurance company submits a counteroffer. A counteroffer is an amount that the insurance company agrees to pay to settle the claim. The amount is lower than the amount you demanded in your letter.

Negotiating a Settlement for Your Personal Injury Claim

If you sustained catastrophic injuries or permanent disabilities, it might be more challenging to negotiate a settlement. These cases involve very high amounts for damages that most insurance companies are unwilling to pay. The company must decide whether it wants to risk the cost of a trial and a potential judgment based on the case’s facts.

However, many claims can be settled through negotiations. Your attorney demands an amount at the high end of the settlement scale in the initial demand letter. However, that might not be the amount a jury is willing to award for your claim.

Your lawyer analyzes the facts in your case, any weaknesses in your case, and the insurance provider’s counteroffer. Your lawyer may advise you to accept the counteroffer or continue negotiating for a higher amount based on all relevant information. 

The process of settling your personal injury case could involve several months of back-and-forth negotiations with the insurance company. However, it begins with the initial demand letter drafted by your attorney.