Kenny Habetz Injury Law | May 25, 2023 | Personal Injury
Insurance companies pay most personal injury claims, especially in vehicle accident cases. The great majority of personal injury cases settle out of court after a period of negotiation. The most common way to kick off negotiations with an insurance company is by sending a settlement demand letter.
Preliminary Matters Before Sending a Demand Letter or Negotiating
Take care of the following matters before you draft your demand letter.
Wait Until You Reach Maximum Medical Improvement (MMI)
You reach MMI on the day that your doctor declares that your condition has improved as much as it is ever going to. Hopefully it means you have fully recovered from your injuries. If not, it means you will continue to suffer from some sort of disability.
You need to reach MMI before filing your claim. Once you reach MMI, you can more easily calculate your total medical expenses and lost earnings.
Investigate Your Claim
You (or better yet, your lawyer) need to perform a preliminary investigation of your accident and injuries so that you will know what to include in your demand letter.
- Take photographs of the scene of the accident, any injuries, and any property damage (such as a totaled car).
- Compile a list of eyewitnesses.
- Obtain copies of your medical records.
- Get a copy of any accident report. The police typically prepare an accident report after a car accident. Accident reports are useful evidence even though you usually cannot use them in court.
If your case is complex enough, you might even seek the assistance of an expert witness. An expert witness can help you even at the negotiation stage of a claim.
Calculate Your Damages
In addition to economic damages such as medical expenses and lost earnings, you need to come up with a figure for non-economic damages such as pain and suffering and emotional distress. If you are still suffering from disability even after reaching MMI, you will need to calculate your future damages. You might need to hire an expert to help you with this.
Identify the Responsible Party
“Responsible party” means the party who will actually pay your claim. Usually it’s an insurance company, not the defendant. However, if the defendant is a business, they might prefer to pay your damages rather than claim against their insurance policy.
Tips for Writing a Demand Letter
When drafting a demand letter, use the following format as a general guide:
- Provide a basic description of the accident. In many cases, this might add up to only a paragraph or two. Don’t provide too much detail—you can always add detail later.
- Say why the defendant is liable for your claim. If they acted negligently, for example, say so. On the other hand, the defendant might bear vicarious liability, as the employer of an on-duty employee who acted carelessly.
- Explain why the responsible party is liable. Typically, it is because they provided the defendant with a liability insurance policy.
- Include a description of your losses, including both your injuries and any property damage.
- Describe your damages. These should include both economic damages (medical expenses, lost earnings, etc.) and non-economic damages (pain and suffering, for example).
- Demand compensation for your losses. Most lawyers prefer not to ask for a specific dollar amount at this point. Don’t set a deadline for a response unless the statute of limitations deadline is approaching.
- Include basic documentation such as photographs of your injuries, etc.
If you send the demand letter to an insurance company, they will respond with a “reservation of rights” letter. Don’t worry; this is routine. It’s not a rejection of your offer to settle. Hopefully, the responsible party will issue you a settlement offer. You can expect it to be extremely low. Simply respond with a more realistic counteroffer, perhaps with some padding to give you room to bargain.
Ask an Experienced Personal Injury Lawyer to Draft Your Settlement Demand Letter
A settlement demand letter is an important legal document that you must draft carefully. One wrong word or one misplaced sentence can exert a harmful effect on your eventual settlement. In a worst-case scenario, a serious mistake in a demand letter could ruin your chances for settlement or severely limit your options.
Accordingly, you should consider hiring a personal injury lawyer to draft your settlement demand letter for you. Your lawyer will probably charge legal fees based on the contingency fee system, which means you only pay legal fees if your lawyer wins your case.