“Demand Letters” to Insurance Companies in California

If you are injured in an accident, you can send a demand letter to the person or company responsible for hurting you, requesting that they financially compensate you now so they can avoid being sued.

Personal injury attorneys are skilled in composing effective demand letters that compel at-fault parties to resolve legal matters quickly and in your favor so that everyone is spared the time and trouble of litigation.

To help you understand how to write a great demand letter, our California personal injury lawyers answer these faqs:

• 1. What is the purpose of a demand letter in a California injury case?
• 2. Why is a well-written demand letter important?
• 3. What information should the letter contain?
• 4. Should a specific dollar amount be requested?
• 5. Can I submit a demand letter without the aid of an attorney?
• 6. What is California’s new law on “time-limited demands”?
• 7. Sample demand letter for a personal injury case
• Additional resources

1. What is the purpose of a demand letter in a California injury case?

It is similar to an opening argument in a court case. It explains to the insurance adjuster:

• When and how the accident or incident happened,
• Why the defendant is responsible,
• The extent of your injuries, and
• The damages you have incurred and will likely incur in the future.¹

Since the goal is to reach a settlement out of court, we suggest you call the letter a “settlement letter” rather than a “demand letter.” These tonal word choices may make all the difference in how the defendant responds.

2. Why is a well-written demand letter important?

A well-written letter sets the tone for the settlement negotiations. It lets the insurance claims adjuster know you are serious about pursuing your right to compensation, whether as

• a lump sum or
• through payment plans.

It presents enough facts to improve the odds of settling a case without having to get courts involved, while saying nothing that might come back to hurt your case should a trial prove necessary.²

Note that it is very important that the demand letter be professional and not threatening. You could be prosecuted for extortion if you claim in your letter that you will report the other party to the police or damage their reputation if they do not comply.

3. What information should the letter contain?

A personal injury demand letter does not need to be lengthy. However, it should present enough information to give the adjuster a clear sense of what happened. It should also set forth a strong case for why the defendant is liable and how you have been injured.

Information that should be provided in a formal demand letter usually includes the following 10 things:

1. The time, date and location of the accident or incident,
2. The names and contact info of the parties involved,
3. The specific relief being sought,
4. A clear account of what happened and the reason you are seeking relief (such as breach of contract, or failing to comply with a cease and desist letter),
5. A reasonable deadline for the party to comply with the demands,
6. That being sued is the consequences for not complying,
7. What injuries you sustained,
8. Any applicable laws and CACI jury instructions that support your claim,
9. Any supporting documents in your possession, such as:
   • X-rays, MRIs or other objective test results;
   • Photos and/or videos of the accident scene;
   • Photos and/or videos showing your property damage and/or physical injuries;
   • “Demonstratives” such as animations or graphics that illustrate the accident; and
10. A summary of damages you incurred and are expected to incur in the future – including:
    • Medical bills,
    • Car repair bills,
    • Lost wages,
    • Future lost earning capacity (with an opinion letter from an economic expert, if appropriate),
    • (In non-injury cases, other expenses such as security deposits being held by landlords, or overdue bills to business owners),
    • An explanation of any non-economic damages — such as scars, loss of physical function, and pain and suffering — with supporting photos, documents and doctor’s reports, if available.

The demand letter should be sent by certified mail, return receipt requested so you can show proof of delivery. If you cannot obtain the address, you can use email and request a “read receipt”. You may also want to consider sending the demand letter by both email and mail to cover all bases.

Make sure to know the correct name of the party being sent the demand letter. Businesses may be licensed under a different name than its advertised name. Plus it is usually better to address the letter to a registered agent rather than the business in general. (Registered agents can be found on the California Secretary of State website.)

Also be sure to send the demand letter well in advance of any applicable statute of limitations to file legal claims. If the other party fails to comply with the demand letter, you want enough time before the deadline to be able to bring a winning lawsuit.³

4. Should a specific dollar amount be requested?

You should generally not ask for a specific dollar amount. For one thing, the full extent of damages, attorney’s fees, and court costs is not always known at the time the letter is written.

More importantly, asking for a total amount of money sets an upper limit for the negotiation that can be hard to increase. Therefore it is usually to your advantage to have the adjuster make the first offer.

The exception is when you are seeking the maximum amount payable under an insurance policy and that amount is both known for certain and supported by the evidence.

Example: Janice suffers a brain injury after hitting her head on the concrete as the result of a slip-and-fall accident during a neighbor’s pool party. Janice’s lawyer confirms that the neighbor has a homeowner’s policy and umbrella policy with combined limits of $2,000,000.

Janice’s medical bills are projected to top out at several million dollars and Janice will likely require lifelong care. Therefore her lawyer is comfortable proposing the case be settled for the policies’ limits.

Ideally, a demand letter will trigger a good faith negotiation process and counter-offers resulting in a favorable settlement offer without having to resort to trial. In some cases, you and the defendant may jointly choose to use mediation or arbitration.⁴

Note that in some cases, it may be possible to “pop” the policy – meaning to recover more money than the insurance policy’s maximum limit. Consult with an attorney on if this is feasible and how.

5. Can I submit a demand letter without the aid of an attorney?

The demand letter is one of the most important documents an insurance adjuster will receive. Its importance cannot be overstated.

As a result, you may prefer to have a lawyer write one on your behalf. Lawyers write these communications on a regular basis and know what details to include. Just as importantly, they know what not to say.

Additionally, it is sad but true that adjusters pay more attention when there is an attorney experienced in California law involved. We do not take a dime from our clients unless and until the case settles or we win at trial. Adjusters know this.

The mere fact that we have reviewed the facts and accepted a case sends the message that the claim has substance and warrants legal remedies. Adjusters are familiar with all the sample demand letters on the internet and simply do not take them as seriously.⁵

5.1. Small Claims Court

If you seek no more than $12,500 in damages, you can consider going through Small Claims Court. You are not allowed to have an attorney represent you in court, though you are advised to consult with one before sending your demand letter.

Learn more about small claims at the California Courts Self-Help Guide.

6. What is California’s new law on time-limited demands?

A “time-limited demand” is a formal settlement offer that expires after a specified period, usually 30 days. If you make a time-limited demand – and the defendant does not accept within the time limit – they risk having to later pay your attorney fees and costs if:

• your case goes to trial and
• the court awards you the same or higher damages than you originally requested.

To comply with the new law, you must prominently label the time-limited demand and state the exact terms offered very clearly, including the time period for acceptance. You should include precise statutory language such as:

“This time-limited demand shall be deemed withdrawn unless it is accepted within 30 days of receipt by verifiable written communication to the undersigned.”

Consulting an attorney is highly recommended when making or responding to time-limited demands given the legal conditions and risks involved.⁶

7. Sample demand letter for a personal injury case

[Date] [Name and address of insurance adjuster]

Re: [Your name] Date of incident: [date] Claim/Policy Number: [number]

Dear [Name of adjuster],

This constitutes a formal settlement letter requesting you provide fair compensation to me, [your name], for injuries and damages I incurred due to the incident on [date of incident] at [location of incident].

On [brief summary of incident and how it occurred – 2-3 sentences]. As a direct result of [name of insured/at-fault party]’s negligent/careless [actions], I sustained [list injuries and other monetary and non-monetary damages. For example: a broken wrist that required surgery, 6 months of physical therapy, permanent scarring, transportation costs for medical appointments, emotional distress, loss of wages, etc.]

According to California law governing [cite specific law violated if known], it is clear your insured was at fault and liable for my injuries and losses.

As evidence supporting my claim, I have enclosed [list documentation – such as medical records, bills, photos, witness statements, etc.] This documentation makes clear the extent of harm I have suffered due to your insured’s negligence.

I expect a response within 30 days addressing compensation you will provide for my injuries, losses and suffering. If I do not receive an adequate settlement offer, I will have no choice but to take this matter to court. I look forward to resolving this claim promptly and fairly. Please contact me at [your phone and/or email] or have your attorney get in touch with me right away.

Sincerely, [Your signature] [Your full legal name]

Enclosures: [List again]

However, you are strongly advised to retain experienced legal counsel to handle your case from the beginning. They know best how to approach insurance adjusters and achieve favorable negotiations quickly.

Additional resources

For more in-depth information, refer to these scholarly articles:

• A Proactive Approach to Avoiding Disputes – Dispute Resolution Journal.
• The dos and don’ts of demand letters – Wisconsin Law Journal.
• Priming Legal Negotiations Through Written Demands – Catholic University Law Review.
• The Insurer’s Duty to Defend Pre-Suit Demand Letters – Brief.
• A Shot across the Bow: How to Write an Effective Demand Letter – Journal of the Association of Legal Writing Directors.

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Legal References