When you're making a personal injury claim after any kind of accident, understanding the settlement process can be a bit tricky, especially since most people aren't that familiar with insurance companies and the claims process. But a key step in settlement talks is the demand letter, which is usually sent by the injured person (often through an attorney) to the company that insures the person or business who seems to be responsible for the underlying incident, whether it be a car accident, a slip and fall, or something else.
The demand letter lays out a number of details, especially presenting the injured person's side of the case—how the injuries happened and what those injuries are, including specifics of medical treatment and how the injuries have impacted the claimant's life. 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 from liability. Get tips on writing your personal injury demand letter.
After you send a demand letter, one of several things can happen:
The insurance company accepts your demand, and the settlement goes 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. (Learn more about the timeline of a typical personal injury claim.)
The insurance company makes a counter-offer.
If the insurance comes back to you with a settlement offer of its own (often for significantly less than what you asked for in your demand letter), you'll have to decide if you want to accept the counter-offer, or if you want to continue to negotiate or file a personal injury 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. (Get tips on responding to an insurance company's too-low settlement offer.)
The insurance company denies your claim and refuses to pay you anything.
An insurance company denial of an injury claim is a rare occurrence, since most insurance companies want to settle a claim (a sure thing) before courts get involved (an unpredictable process). 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, 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, your injuries are significant, and you're representing yourself, it may be time to think about hiring a personal injury attorney to make sure your case is in experienced hands.