Understanding the demand letter process can be a bit tricky, since most people don't face a lot of personal injury insurance claims in their lives.
A demand letter is usually sent by an injured person (typically through an attorney) to the insurance company of the person or business responsible for causing the injury (or the accident that led to the injury).
The letter lays out a number of things, especially presenting the injured person's side of the case -- how the injuries happened, and what those injuries are, including details of treatment and how the injuries have impacted the claimant. The letter also makes a specific "demand," a dollar amount that the injured person will accept in order to resolve the case and release the other side of liability.
After you send a demand letter, one of several things can happen:
The insurance company can accept your demand, and the settlement will go forward.
You'll receive the compensation you asked for and sign a release of liability in exchange. It is rare for this to happen without at least some negotiation on the part of the insurance company.
The insurance company can make a counter-offer.
You'll have to decide if you want to accept that offer or if you want to continue to negotiate or file a lawsuit. This is usually how things go after a demand letter is sent: it triggers a back-and-forth process where the injured person starts with an inflated demand amount, the insurance company comes in with a much lower offer, and the two parties meet somewhere in the middle.
The insurance company can outright deny your claim and refuse to pay you anything.
A denial of an injury claim is a rare occurrence, since most insurance companies want to settle a claim before courts get involved. Denials usually only occur when the claim is clearly unsupported by evidence (the "injured" person has no medical bills or records of treatment) or there is a procedural problem with the claim itself.
If your demand letter goes unanswered, and you’re sure you sent it to the right party, the first step is to send a follow up letter to make sure your original demand letter was received. If you still get no response, you may need to file a lawsuit to get the process started. See Filing a Personal Injury Lawsuit When Your Demands Go Unanswered