Whether you’re making a relatively small insurance claim or filing a personal injury lawsuit, at some point you’ll send a demand letter to the other side as part of the process. This letter will detail the accident and your injuries, and will include a dollar figure that represents a reasonable summation of your losses -- meaning the amount of compensation you’ll accept in order to settle the case and release the other side from any further liability.
But when should you send this demand letter? In any kind of injury claim, think of the demand letter as the official starting gun that signals the initiation of serious settlement negotiations. You’re basically making your entire case in your demand letter, so make sure you’ve given yourself the best chance of ending up with a fair settlement. In this article we’ll discuss a few things that you need to understand -- and be able to document -- before you send a demand letter.
Have a Clear Understanding of What Happened -- and Who Was at Fault
In most cases, the demand letter is usually only sent once you (and/or your attorney) have conducted a thorough investigation into the circumstances of the accident, including who was at fault. For most accidents, including car crashes and slip and fall incidents, this usually means that you’ve answered the question “Who was negligent?” In your demand letter, if fault is at issue, you can present concrete details of the other side’s legal liability for the accident by documenting evidence of the incident and including witness testimony as to what happened.
In some cases, especially when you’re dealing with an insurance carrier, all you’ll need to show is that the insured person or business was somehow careless, and that you suffered injury. You may not need to get into complex issues of legal liability. (Learn more: You May Not Need to ‘Prove’ Fault.)
Understand the Costs and Impact of Your Injuries
Since your demand letter needs to capture and present everything related to your injuries and their impact on your life, don’t send the letter before the true extent of your losses are known -- or until those damages can be reasonably forecast when it comes to future medical care or lost income.
For example, if you're still receiving significant medical treatment because of injuries attributable to the accident -- and your health care providers haven't presented a clear picture of how much treatment you'll need in the long run -- it may be best to hold off on sending that demand letter, since there may be too large a gray area when it comes to your future medical bills.
In short, it's best to send a demand letter only after you (and/or your attorney) have taken a thorough look at the impact of your injury on all aspects of your life, and made a reasonable valuation of your injury claim. This is important because in your demand letter, you will be detailing for the insurance carrier or the defendant:
- the nature and extent of your injuries
- all medical treatment you’ve received as a result of the accident
- all medical treatment (including rehabilitation, physical therapy, etc.) that you will need to receive in the future because of the accident
- the income you have lost because of the accident and/or your injuries
- the future lost income or the lost earning capacity that can be reasonably attributed to your injuries, and
- pain and suffering you’ve endured because of your injuries, and
- any other compensable losses associated with your injuries
Remember that, while the demand letter usually serves as a mere starting point for serious settlement talks, it sets the tone for how seriously your claim will be taken, and ultimately, for the amount of compensation you will receive. So, pay particular attention to presenting a thorough picture to the other side -- how the accident happened, how you’ve been affected, and why you’re entitled to full and fair compensation for your losses.