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A Demand Letter is an attempt to resolve a dispute by demanding that the offending party’s insurance company compensate an injured party within a certain period of time.
It is a formal letter, sent via certified mail, and it is usually supported by exhibits and other documents that proves the injured party’s position.
The offending party’s insurance adjuster has a certain time period to evaluate the Demand Letter before formalizing a response to either accept or reject the demands.
1) What is a Demand Letter?
Generally, a personal injury Demand Letter includes two parts:
an outline of the claims for liability – or responsibility – for causing the injury; and
an outline of the claims for damages – or injuries – and how they are valued.
Depending on the details of the case, other issues may also be discussed. The Demand Letter is supported by exhibits and other documents to prove the injured party’s position.
2) What does a Demand Letter include?
Generally, a Demand Letter is important because it provides an injured party an opportunity to resolve their claim for injuries without further escalation.
It also provides an opportunity to save time and expense, as well as to bring closure to the injured party’s legal case so they may move on with their personal lives.
Finally, a Demand Letter preserves the victim's rights to pursue additional compensation. Additional compensation could include claims for attorney's fees, due to the defendant being stubbornly litigious. Additionally, the Demand Letter may preserve claims against the insurance carrier, directly, for bad faith.
3) Why is it important to send a Demand Letter?
An effective Demand Letter does not simply make conclusory allegations.
Instead, it provides an outline of an injured party’s claim for liability and damages, with supporting records.
Focusing on the individual details and issues of the specific claim in a clear and concise way help make Demand Letter’s effective.
4) What makes for an effective Demand Letter?
Ordinarily, the offending party’s insurance carrier has 30 days to respond to a Demand Letter.
This period of time complies with several Georgia statutes to allow the insurance carrier time to make a thoughtful assessment.
For auto accidents involving the injured party’s UM/UIM insurance carrier, the statutory time limit is 60 days.
5) How long does an adjuster have to respond to a Demand Letter?
Insurance companies and their insurance adjusters value claims very differently.
Insurance companies may have general guidelines for valuing personal injury claims, and their individual adjusters may have wide discretion to value claims within those guidelines.
In other words, there is no way to predict how an insurance adjuster will value your case under any set of facts.
6) Do all insurance adjusters value claims the same?
The amount you should demand in a Demand Letter depends on the information available, the circumstances of your case, and of course, your injuries (or damages).
There are so many different variables that make each case different, you should confer with your attorney to decide on the amount that accurately reflects your case.
7) How much should I demand in a Demand Letter?
A Demand Letter is not often admissible as evidence at trial because it is irrelevant for proving liability and damages.
Generally, statements made pursuant to settlement negotiations are not admissible at trial. This includes Demand Letters as well as the insurance carrier's responses to these letters.
Demand Letters only become admissible evidence for other purposes, such as during a bad faith claim. Or, they may be admissible to show that the defendant was stubbornly litigious. These scenarios are rare.