How to Write a Settlement Demand Letter

There are a lot of articles on-line about how to write a good demand letter. Maybe you have already read a few articles before landing here. However, most of these “how to write a personal injury demand letter” articles are not just fundamentally useless, but actively wrong. Useless advice is bad enough, but this nonsense can actually undermine your case.

Before we get into how to write a settlement demand letter in a personal injury case, here are some sample for different types of accident and injury cases:

Sample Demand Letters 10 Settlement Demand Letter Tips

Here are ten “dos and don’ts“ when writing a settlement demand letter in a personal injury case:

1. DON’T Write War and Peace.

The size of your demand letter should correlate to the size of your claim. If the case is literally worth millions, then you want a demand package that fully lays out the nuances of the claim. If you are bringing a legitimate seven figure case, insurance companies are willing to spend the time, actually getting in the weeds of what the case is really about and the details of the victim's losses. 

But, conversely, if you have $10,000 in medical bills and no permanent injury; insurance companies are rarely going to focus on details outside of the four corners of the medical record for a pre-suit settlement evaluation.

What is actually harmful in writing a demand letter that is too long? Probably no harm, if you are representing yourself. But if you are an attorney, writing an inappropriately long demand letter that is very disproportionate to the size of the case sends an “I’m an inexperienced lawyer and I have no idea what I’m doing” alarm. The insurance company will sense that you are out of your depth and will never take the case to trial.

The result? You will get a settlement offer that recognizes that there is no chance of a lawsuit ever being filed, and their courage to bluff you to see what you will do will increase. Why? Because the insurance company will expect you to take whatever settlement you can get.

2. DO Highlight Unique Facts About Your Case. accident

If there is something about your case that makes your claim more valuable, make it clear. This is another reason why writing a treatise is dangerous - you bury what really matters. If you missed your daughter’s wedding because of the accident, or you were a marathon runner who can no longer run because of a herniated disc, this is something you need to effectively communicate to the insurance company.

Someone once wrote that good writing does not need to bold, underline, italicize, or use any other emphasis to make your point. But a demand letter is not the great American novel – you want to add the extra emphasis to the unique facts of a case. Because you have to work to get their attention. You settlement demand letter will be reviewed by an adjuster who more than likely will look at several demand letters over the course of a day while plowing through hundreds of pages of medical records. Using bold letters, underlining, italicizing, or using ALL CAPS, or any other emphasis may make your key points stand out when the adjuster would otherwise ignore them.

The caveat to this is you cannot go over the top. Do not write a letter with 15 emphasized points. This is unbelievably counterproductive. We are talking about one or two key points that you may need to underscore.

3. DON’T Send the Demand by Certified Mail

Listen, I get that many of you out there – both victims and lawyers -- are not looking to file a lawsuit. You just want to settle your case, for as much money as you can, without filing a lawsuit. I get it. But you have to look the part. Sending a demand letter by certified or registered mail is a loud signal that all you are looking to do is settle the case.

In my office, I do not send out demands by certified mail and I do not harass adjusters to respond to our demands (unless my client has communicated a critical need for money immediately). For us, the demand letter is a “we can settle this if you put real money on it, otherwise we are going to come out swinging” event in the case. We love trying cases. But I cannot emphasize enough that if you are not of this mindset, you still have to fake it like you are.

4. DO Differentiate Your Case

The adjuster is going to read the medical records in your case. For all of their failings, insurance adjusters do a solid job of pulling out the critical facts in a demand letter. The most important part of the demand letter is explaining why your case is worth more than the adjuster thinks and worth more than cases with similar medical treatment, bills, etc.

5. DON’T Make a Specific Settlement Demand

There is an exception to this rule - we will get to in a second. Unless you really know what you are doing, making a demand is a mistake. You are either going to make a settlement demand that is too high or too low. Either is a catastrophic mistake. You can mitigate your risk by letting the insurance company make the first move.

6. DO Demand Policy Limits

While settlement demands before an offer are generally a bad idea in most cases, demanding the policy limits makes sense if the value of the case is in the same ballpark as the policy limits. You should make the demand subject to a verification of assets and other contingencies you control so you are not actually locked into the demand.

You have to find out what the policy limits are. Most states have laws that allow you to do this. Maryland requires insurance companies to provide this information if the Plaintiff jumps through a series of hoops.

7. DON’T Go Over-the-Top letter

Avoid using incendiary language or making wild threats. Do not suggest the possibility punitive damages unless you are sure your jurisdiction allows them in your particular case. Insurance adjusters deal with over-the-top tough guys every day and they are immune to it. Be clear, be resolute, but check your hyperboles at the door. Lawyers who talk like this are the least likely actually to mean it and every insurance adjuster knows it.

8. DO Make Clear the Case Will Not Settle Unless…

Our demand packages make clear that there are some factors – sometimes external to the medical records --- that must be considered and included in the settlement calculus or the case will not settle.

9. DON’T Set a Time Limit on a Response Unless You Mean It

You cannot tell an adjuster you will file suit if you don’t hear back from them by a certain date and then not file suit on that very date. If the insurance adjuster does not know the lawyer or if the victim is representing herself, they tend to discount your bluster. There is no getting around this. But giving them proof that you are all talk is going to be fatal to your effort to maximize the value of your claim.

10. DO Include All of Your Damages

The idea that there is a settlement formula based on the amount of medical bills is nonsense. Still, there is no question that the amount of the victim’s hard economic damages has an anchoring effect of the value of the claim. If you have spent or lost just a penny from the result of the car accident or other tort, include it in your demand package with adequate documentation.

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