When you're trying to settle a personal injury case, the demand letter often serves as the centerpiece of the negotiation process. In your demand letter, you spell out for the other side (or in most cases, the other side's insurance adjuster):
Your letter concludes with a demand for a lump sum to settle your claim. We'll take a closer look at these elements shortly, but first things first.
Before you start writing your personal injury demand letter, make sure you have copies of all your medical, pharmaceutical, and other records and bills. If you missed work or had to take PTO, get a letter from your employer's human resources office documenting the time you were away and how much income or accumulated PTO you lost.
You may need to gather other evidence as well, like witness statements, pictures of the accident scene, or a police report. Have all of this evidence at hand so you don't have to delay sending your letter to do additional legwork.
Before you begin to write your demand letter, review your notes from the days and weeks following the accident to remind yourself of the details—what happened, how you were hurt, your pain and discomfort, the inconvenience and disruption of your life, and your medical treatment. (Learn more about the importance of taking notes after an accident or injury.)
You want the insurance adjuster to know that you have at least a basic understanding of the law. That means you'll probably need to do some online research into things like fault, negligence, and the duty of care. You should know about the different kinds of damages and how to explain them in your demand letter. Finally, take the time to learn about how a personal injury lawsuit works if settlement talks fail and you have to file in court.
Your demand letter is almost certainly going to wind up on the desk of an insurance adjuster. This person's only job is to investigate and settle personal injury claims just like yours. Personal insults, wild, unprovable claims, and overblown emotional rhetoric won't do you any good. Quite the opposite: You'll expose yourself as an amateur, whose claim and demand don't need to be taken seriously.
Your demand letter should be complete, thorough, and factual. Remember that the adjuster might respond to anything you say by asking you to explain or prove it. Don't make assertions that you can't back up with proof. Describe your injuries, including your pain and suffering, in as much detail as needed to give a full picture of what happened to you. And keep your demand reasonable. If you have medical bills of $2,800 and you demand $1 million to settle, you'll never regain your lost credibility.
Begin by describing who was involved, what happened, and when and where. You want to be sure you tell the complete story as you experienced it, but don't waste time with things that don't matter. What you had for breakfast the morning you were injured, for instance, doesn't matter—unless you're bringing a claim for food poisoning against the restaurant where you ate.
You've heard the old line that there are two sides to every story. That's true in most personal injury cases. Keep in mind that the insurance adjuster already has your opponent's side of the story. This is your chance to tell your side. Don't make up facts, don't lie, and don't exaggerate. As soon as the insurance adjuster catches you changing your story, you've lost.
Describe all your injuries, both physical and emotional, and all the treatments you've received. And don't be shy. Emphasize your pain, the length and difficulty of your recovery, and any negative effects your injuries have had on your daily life (such as "pain and suffering," and your "emotional distress"). Be sure to talk about any long-term or permanent injury, especially if it's disabling or disfiguring, like permanent stiffness, arthritis, soreness, or scarring.
Try to use appropriate medical terminology to describe your injuries. Saying you suffered a "complete transverse fracture of the distal fibula requiring internal fixation" conveys more information than just saying "I had a broken ankle bone and the doctor had to operate." A site like Web MD will explain medical conditions and treatments, and you can find a medical dictionary there to define medical terms.
You'll need medical evidence to back up your claims of injury and disability. Make sure that everything is documented in your medical records or in a letter from your doctor. If you're making a claim for future medical care and treatment, you'll need medical proof for that as well. Of course, you shouldn't make things up or be overly dramatic. Insurance adjusters have heard it all, and they'll turn a deaf ear to claims they believe are false or can't be proved.
Your demand letter must explain why the other party is legally responsible for your injuries and damages. That probably means showing the other side was negligent. You might also need to explain why you were not at fault for the accident.
In nearly all personal injury cases, proving that the other side was responsible means explaining how they were negligent. To do this, you need to show that the other side had a duty to act reasonably under the circumstances, but failed to do so. In addition, you've got to demonstrate that the other party's negligence caused your injuries and damages.
This sounds like a lot of complicated stuff, but in many cases, it can be broken down into simple terms. In a car wreck case, for example, where the other side ran a stop sign and hit you, it might go something like this:
You should also mention any outside support you have for your theory—a police report in a car accident case, relevant building code sections that may have been violated in a slip and fall claim, or witness statements.
In many accidents, there is some question about whether your own negligence contributed to the accident even though the other person was at fault. Depending on the state where you live, this is called comparative negligence (sometimes "comparative fault") or contributory negligence (sometimes "contributory fault"). At the demand letter stage, you should meet this issue head-on by denying that you share any fault for what happened.
Even if you believe you might have been partly at fault, do not admit that in your demand letter. Although you must consider your own carelessness in deciding what a fair settlement might be, it's not your job to make comparative negligence arguments for the insurance company. If the insurance adjuster brings up the subject during settlement negotiations, you can debate the question then.
But take note: If the adjuster insists that your fault is an issue in the case, you need to consider hiring an experienced personal injury attorney. In some states, your comparative or contributory negligence might kill your claim entirely. That's not an issue you want to tackle on your own.
In legal terms, your injuries are the physical and emotional harms you suffered. Damages are how the law puts a dollar value on those injuries. Damages come in two basic categories. The first is "economic" damages, sometimes also called "special" damages. The second is "noneconomic" damages, sometimes also called "general" damages.
Economic damages are the kinds of things that are easy to quantify in dollars—medical bills, lost wages, and pharmacy charges are the most common examples. You should list and total all of your economic damages. Be sure to include your lost wages if you missed time from work or had to take PTO because of the accident. As will be seen, you'll need a total for your medical expenses before you can calculate your noneconomic damages.
Noneconomic damages are things that are difficult to quantify in dollars—like pain and suffering, emotional distress, and disability and disfigurement. How do you put a dollar value on these damages? There's no single rule, but most insurance adjusters and personal injury lawyers use a multiple of medical expenses to compute noneconomic damages.
So, for example, let's say your medical expenses total $6,500. A typical noneconomic damages multiplier is two or three, but might be five or higher if the facts are particularly shocking or your injuries are severe and permanent. For ease of illustration, we'll use a multiplier of three. This would mean your noneconomic damages are $19,500.
You should start with a multiplier that results in noneconomic damages higher than what you're really willing to accept in settlement. This leaves you with room to negotiate downward. If you start with your bottom-dollar settlement figure, you've got nowhere to go.
At this point, all the hard work is done. Add together your total economic and noneconomic damages to arrive at your total damages. Demand this figure to settle all your claims. The insurance adjuster will come back with a number that's well below yours. Let the negotiations begin.
You may want to let the insurance adjuster know that your letter is a prefiling settlement demand, and that if you must file suit you'll ask a jury to award you a much higher sum. The adjuster knows this, but a gentle reminder never hurts. Finally, make it clear that because your demand letter is an attempt to settle your claims, nothing in the letter will be admissible in evidence if the case goes to trial.
For help tailoring your demand letter to the specifics of your accident, and making your best argument, see How to Win Your Personal Injury Claim, by Joseph L. Matthews (Nolo). And check out Nolo's claim-specific collection of Sample Demand Letters before putting together your own demand to the insurance company.