You've been injured in an accident that was someone else's fault. Your first instinct might be to rush to court and file a personal injury lawsuit. But before you do that, try this: Send the other party (or that party's insurance company) a short, clear letter demanding fair payment for your losses.
Most personal injury cases settle. An effective demand letter can be the catalyst that gets negotiations started by:
In this article, we'll explain why you should write a demand letter. We'll also tell you what your demand letter should include, and give you an example of a basic personal injury demand letter.
A well-written personal injury demand letter does three important things. First, as mentioned above, it starts serious settlement negotiations. If you file a claim with the other side's insurance company, they might make you a settlement offer early on, but it'll almost certainly be a lowball offer. You, the injured party, often need to make the first meaningful move. You do that with your demand letter.
Second, your demand letter lets the other side know that you're not going to just go away. You expect a fair settlement and if that doesn't happen, you'll talk to a personal injury lawyer and file a lawsuit.
Third, the process of writing a demand letter will help you get your case organized. You'll need to think about how best to present the facts. You must gather evidence, like photos of the accident scene, witness statements, and your medical records and bills. And you'll need to do some research to figure out how much your case is worth.
The first rule of writing is to know your audience. Your demand letter is almost certainly going to wind up in the hands of an insurance adjuster. This is someone who is responsible for dozens, maybe even hundreds, of claims much like yours. Keep your letter factual and businesslike. Over-the-top rhetoric and emotional pleas won't do you any good. If anything, you'll reveal yourself as an "amateur," someone not to be taken seriously. The proper tone will set the stage for your negotiations.
Here's what your letter should include:
Describe the parties who were involved, what happened, and when and where. The insurance adjuster already has one side of the story, as told by the party who injured you. This is your chance to lay out—in factual but descriptive terms—your side of the case. Don't make outlandish accusations or say things you can't prove. Keep in mind that this is the opening round, so to speak, of negotiations. The insurance adjuster might respond by asking you for proof of what you say. If you don't have it, you'll end up looking foolish.
Your injuries include every variety of physical and emotional harm you've suffered. Broken bones, torn ligaments, pain, and emotional distress are examples. In the language of insurance companies and lawyers, "damages" is an expression of your injuries in dollars and cents.
Be sure you take the time to describe your injuries in detail. Again, don't exaggerate, but be thorough. Injuries and damages are the "engine" that drives settlement value, so be sure the insurance adjuster knows everything. Attach copies of your medical records and bills to prove what you're claiming.
Damages come in two basic categories: Economic damages (sometimes also called "special" damages) are losses that are easily expressed in dollars—things like medical bills, lost wages, and the cost of medical equipment such as crutches or a wheelchair. Noneconomic damages (sometimes also called "general" damages) are losses that are more difficult to quantify—pain and suffering, emotional distress, disability and disfigurement, and loss of enjoyment of life are common examples.
How do you calculate a value for noneconomic damages? There's no single "correct" rule. Most attorneys and insurance adjusters use a multiple of medical expenses to arrive at a figure. In a "typical" personal injury case, the multiple is two or three times medical damages. But if the facts are especially shocking or the injuries are severe, the multiple might be five (or even more) times medical expenses.
So, for example, if your medical expenses total $20,000, you might value your noneconomic damages at three times that amount, or $60,000. Then you add your economic and noneconomic damages together to arrive at a settlement value for the case.
To win in court, you must be able to prove that the other side is to blame for your injuries. The insurance adjuster will need to be convinced of this, too. In most personal injury cases, this means proving that the other side was negligent. In general, proving negligence means showing that the other side failed to act as a reasonable person would have under the circumstances, and that this failure caused your injuries and damages.
At this point, all the hard work is done. All that's left is to total your damages and make your settlement demand. Be sure to let the insurance adjuster know that this is a prefiling demand and that if you must file a lawsuit your demand will go up.
If your demand letter finds its way to an insurance adjuster, you can expect a reply, even if that reply is "We're not making an offer," or an unacceptably low offer. If the other side won't make any offer, then you'll need to decide if you want to file in court. Before you spend your time and money there, you should consider talking to an experienced personal injury lawyer to see if the case is worth pursuing.
If the offer is unacceptably low, then you'll need to make a counteroffer. You want to be able to do that intelligently, and that will mean understanding why the insurer's offer was so low. Perhaps you simply overvalued your case. Or maybe the insurance adjuster is testing your nerve to see how you, a non-attorney, handle negotiations. Here too, it can be worth your while to speak to an attorney who understands how insurance negotiations work.