Settlement Demand Letter to Your Insurance Company: What Is It?
When you file an insurance claim, you expect your insurance company to act in good faith and provide you with the coverage you are entitled to. However, insurance companies are businesses whose primary goal is maximizing profits. As a result, they may offer you a settlement that is less than what you deserve. This article will discuss the key elements of a settlement demand letter and how to write one effectively to ensure you receive the compensation you deserve.
What Is a Settlement Demand Letter?
A settlement demand letter is a structured attempt to resolve a dispute without taking the matter to court. This can often be a preferable course of action as it allows parties to resolve their own disputes without the time, expense, and uncertainty of litigation.
By explaining your case to the recipient of the letter, providing evidence, and demanding a fair settlement figure, you can show the at-fault party or their insurance carrier that you do not want to sue them, but you are ready to take them to court if they do not leave you with another option.
For this reason, a well-written demand letter includes supportive evidence of the harm suffered, shows how the recipient caused the harm, and demonstrates the manner in which damages, including pain, suffering, and emotional distress, have been calculated.
It’s also important to note in the demand letter that it is a demand letter for settlement purposes only to make it clear that nothing stated in the letter can be used in a court case (both Texas state and federal rules of procedure prevent settlement communications from being entered into evidence).
How Long After a Demand Letter Does Settlement Take?
After sending a demand letter for settlement purposes only, the waiting begins. Don’t be surprised if you have to wait for longer than the deadline you provided to get a response.
This is because several things are likely happening on the other side. For starters, the recipient will probably take your letter to their attorney or may even have to find an attorney for the first time. In either case, the recipient/their attorney is likely to take as much time as they can to review the contents of your settlement demand letter, double-check the facts and law, contact you for additional information, and determine if there are any other parties that they can try to hold responsible.
Once these steps have been taken, you can expect to receive a response letter from the recipient of your settlement demand letter, which may include a counteroffer. Don’t be surprised if the counteroffer is much lower than you demanded (a common opening tactic).
From this point forward, negotiations are underway and may continue until a compromise is reached. Just how long after a demand letter does settlement take? Typically, this can be weeks, months, or even longer than a year. A major factor in your favor will be if your losses continue to accrue, gain interest, or accumulate legal fees, in which case the party at fault wants a full settlement and release as soon as possible.
What If the Insurance Company Doesn’t Respond?
If your demand letter goes unanswered, it is important to exhaust all resources to confirm the recipient’s address and ensure that the letter was received. If you still get no response, and your injuries are substantial enough to warrant the continued investment of your time, it is time to hire an insurance attorney to help you pursue justice for the wrongs committed against you.
Tips for Writing a Settlement Demand Letter
When representing yourself or working with a skilled insurance claims attorney, here are some best practices tips for writing a settlement demand letter:
- Make sure that the size of the demand letter correlates to the size of the claim
- Emphasize what is unique or valuable about your claim
- Provide only the strongest and best original evidence to support your claim in attachments/exhibits to the letter
- Demand to know the policy limits of any applicable insurance coverage
- Demand that any evidence the other side has not to be destroyed (spoliated)
- Avoid threats, inflammatory language, or wild accusations – in other words, stick to the facts
- Outline all damages, including future losses, pain, suffering, and emotional distress so that the other side truly understands what the matter will cost them if it advances to litigation
Get Legal Help from MMA Today
As professionals who help clients interpret insurance policies, understand their rights, and recover on their losses every day, the attorneys at MMA Law Firm are well positioned to assist clients with insurance claims in the State of Texas, including managing all aspects of the settlement demand letter process. Contact us today so that we can help you.
This blog published by MMA Law Firm is available for informational purposes only and is not intended to be legal advice on any subject matter. The content available on this website may not constitute the most up-to-date legal or other information.