When you make a car insurance claim, an effective demand letter (sent to the insurance company) tells your side of the story and includes supporting documents to back up your position on key issues like:
- who was at fault for the car accident, and
- the nature and extent of your accident-related losses ("damages" in the language of the law).
Here are some tips on how to write an effective car insurance claim demand letter.
How to Structure Your Car Accident Demand Letter
When you're making an insurance claim with the other driver's insurance carrier (called a third party car insurance claim), you’ll want to address the letter to the insurance adjuster assigned to the matter.
The heading of your demand letter should include the:
- name of the insured (usually the at-fault driver in a car accident case)
- claim number, and
- date of the accident.
The first paragraph should describe the car accident and your injuries. Explain how the other driver is to blame for the accident and back up your position with relevant traffic laws. If the other driver was cited for a traffic violation, be sure to mention it here.
The second paragraph should describe the damage to your vehicle, with estimates of how much it will cost to repair or replace it.
The next paragraph should focus on your car accident injuries, your medical diagnosis, and the course of your treatment. List your treatments in chronological order with bills for each treatment. If treatment hasn’t ended, provide an estimate of future medical expenses.
Most of what you recover for your injuries is compensation for "pain and suffering," discomfort, and disruption of your daily life. Use this paragraph to describe what you went through, or had to miss or give up, because of your injuries.
The last paragraph of your demand letter should summarize your injuries and offer to settle the case for a specific amount of money. Your initial demand should be higher than what you expect to receive, but still reasonable.
Gather Supporting Documents
A demand letter should lay out your strongest arguments concerning liability (fault) and detail your accident-related losses, including:
- property damage
- medical bills
- income loss, and
- pain and suffering.
The insurance company isn’t going to be persuaded to pay you based on your word alone. You’ll have to provide evidence to support your position, like police reports, accident scene photos, medical records, bills from your medical care providers, and documentation from your employer verifying your pay and time away from work.
For example, let’s say you injured your leg in a car accident. After the accident, you were taken to the city hospital by ambulance where you had surgery. After surgery, you went to a private physical therapy clinic for six weeks. Before you write your demand letter, request copies of your medical records and bills from the ambulance company, the city hospital, and your physical therapist.
If your injuries will require long-term treatment, you should ask your medical provider to provide an estimate of the costs of long-term treatment, and then include that estimate in your demand letter.
Gathering documents can be a tedious and expensive process. Some agencies will charge a fee to produce copies of your records. You may have to pay the fee upfront or you may receive a bill after the records are produced. These fees can add up, but an insurance company won't take your demand seriously without proof of your losses.
When to Write the Demand Letter In a Car Accident Case
A demand letter in a car accident case should be sent at the right time—not too early and not too late. But when is the right time?
Wait for Maximum Medical Improvement
The most important rule is that you shouldn’t send a demand letter in any personal injury case until you have either reached a point of maximum medical improvement (MMI) or are very close to that point.
MMI is that point in your recovery when you are as good as you are likely to get. You may not have fully recovered, but your car accident injuries are stable and you have a clear picture of your medical future. You want to wait until you are at MMI to send your demand letter, so that you have an understanding of the full extent of your injuries and know how to value your claim.
A demand letter is an offer to settle. Once you settle, you’re agreeing to release the other party—forever—from liability in connection with the accident. If your injuries turn out to be worse than you first thought, you can’t go back and demand more money.
Wait Until the Adjuster Has a Complete File
Adjusters go through claimants' files with a fine-toothed comb. They will not make a settlement offer until they've reviewed every single medical record, medical bill, and proof of lost earnings that relates to your claim. If you're missing even one medical record or bill, the adjuster will probably not make a fair offer.
It isn’t worth your time to send a demand letter until you've gathered all of your medical records and other supporting documents necessary for the adjuster to evaluate your claim.
Don’t Let the Deadline to File a Lawsuit Go By
If more than six months have gone by since your accident, find out how much time you have to file a car accident lawsuit in your state. Each state puts a strict time limit—called the statute of limitations—on your right to file a lawsuit. If you don't either settle your case or file a lawsuit before your state's statute of limitations expires, your case is very likely over. You'll lose your right to sue and recover damages.
You’ll want to send a demand letter well before the statute of limitations runs, so that the adjuster has enough time to consider your claim and make an offer. If the time limit for filing a lawsuit is coming up in the next six months or so, mention it to the adjuster. The statute of limitations is your problem, not the insurance company’s, but most adjusters want to settle claims before a lawsuit is filed.
How Much Should You Ask for in a Car Accident Demand Letter?
In some cases, it’s pretty easy to come up with a settlement demand figure. If your losses are limited to vehicle damage, you might be able to simply look at the bill you got from your mechanic. Figuring out how much to demand in cases involving permanent injuries is much more complicated.
While there is no reliable plug-and-play formula that will spit out an exact settlement value of your claim, the following tips should help you better put a dollar amount on your damages and figure out how much to demand.
Damage to Your Vehicle
If your car is damaged in the accident, your demand letter should include the cost to repair or replace your vehicle. If your car has already been repaired, ask for reimbursement for your repair bills. Be sure to include transportation costs you had to pay while your car was out of commission, such as the cost of a rental car or bus fare.
If you are waiting for the insurance company to cover your repairs, get a few estimates for how much it will cost to fix your car. Use those numbers to calculate your demand and attach the estimates to your letter. Remind the adjuster that you will run up substitute transportation costs as long as your car is in the shop, and include those costs in your demand.
Learn more about what to do when an insurer says your car is a total loss.
Medical Expenses
Medical expenses are likely to be the trickiest to calculate, especially in cases involving serious injuries. For example, the cost of ongoing care can be difficult to estimate and reduce to a lump sum number that represents a fair settlement.
In cases involving minor injuries, you can total up your accident-related medical bills and use that number when calculating your demand. Be sure to save all bills and receipts to back up your demand.
In cases involving serious cases, you should talk to a lawyer. A lawyer can help you estimate the per-week, per-month, or per-year cost of care, including all doctor visits, prescriptions, rehab, hospital stays, and in-home care.
Talk to your health care providers about the cost and length of your treatment plan as soon as possible. If you don’t, you could be left guessing, and will likely underestimate your potential medical expenses.
Lost Income
If you missed work because of the accident, say so in your demand letter and include a letter from your employer verifying your pay and missed time. You don’t have to explain why you missed work. If the insurance company wants to challenge your claim that you were unable to work, you can talk that out during negotiations.
Other Losses
Most of what you recover for your injuries in a car accident case is compensation for pain and suffering, discomfort, and disruption in your daily life. Don’t be shy about describing the pain, inconvenience, and other losses you’ve experienced. But don’t be overly dramatic either.
You’ll also want to ask for reimbursement for unpaid work that you would normally do yourself—childcare, cleaning, landscaping—but have had to outsource because of the car accident.
State Your Settlement Demand Figure
In the last paragraph of your letter, demand a specific amount of money as total compensation for your property damage, medical bills, pain, suffering, and other losses.
The demand figure in your letter should be higher than the amount you would agree to settle your claim. The letter is the beginning of negotiations, not the end. Your demand should start high, the insurer’s first offer will likely be low, and you’ll agree on a number somewhere in between. Just don’t make your opening demand outrageously high. Your demand should be high, but believable.
Talk to a Car Accident Lawyer
It's possible to put your own demand letter together as part of your car insurance claim, but if your injuries were significant and the insurance company isn't coming to the table with a fair settlement offer, it might make sense to discuss your situation with a lawyer. Learn more about when you might need a lawyer for a car accident case and get in-depth information on working with a personal injury lawyer.