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How To Write a Settlement Demand Letter

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How To Write a Settlement Demand Letter

Most personal injury claims end at the settlement table, not in court. Even those that end up at trial usually start out with the victim sending a settlement demand letter to the appropriate party, typically an insurance company. 

Your chances of winning the full value of your claim depend to a significant degree on how well you write your settlement demand letter. Ultimately, however, keep in mind that it’s best to have a qualified personal injury lawyer write this document on your behalf.

First Things First: Determine the Value of Your Claim

It’s difficult to demand a settlement when you don’t know how much you are asking for. Consequently, you need to determine an approximate value for your claim before you send a demand letter. Consider the factors described below.

Medical Expenses: Reaching MMI

“MMI” means “maximum medical improvement.” You reach MMI when your doctor certifies that you have improved as much as you are ever going to. Only when you reach MMI will you know the full amount of your medical expenses without having to estimate future medical expenses.

Special Case: Florida’s No-Fault Auto Insurance System

Florida’s no-fault system applies only to vehicle accidents, not to other types of personal injury cases such as slip and fall claims. In the event of a car accident, you will probably have to negotiate with your own PIP insurance company, not the at-fault driver’s liability insurance company.

Lost Earnings

How many days did you miss from work due to your injuries? This might be a straightforward question to answer if you work for an hourly wage or even for a salary. It gets trickier if you are an entrepreneur or freelancer with an unstable income.  

Non-Economic Damages

Non-economic damages such as emotional distress or pain and suffering can easily amount to most of the total value of your claim. Be careful not to underestimate their value. 

Diminished Earning Capacity

Diminished earning capacity” refers to the loss of your ability to earn money in the future. If your accident left you permanently disabled, for example, this amount could be immense. 

Who Is Liable for Your Claim?

The party who is liable for actually paying your claim might be the insurance company, not the defendant. No matter how valuable your claim is, however, the insurance company doesn’t have to pay you a dime beyond their policy limits. 

Find out what these policy limits are, and don’t ask for more than the maximum available funds.

The Nuts and Bolts of a Demand Letter

The following is a general checklist for the contents of your demand letter. Use your common sense, as no two letters are exactly the same. Do not use a demand letter sample you find on the internet.

Treat the following as a set of general guidelines:

  • Gather complete information before you start writing. That is what the preceding sections has been about.
  • Describe your injuries and medical treatment.
  • List your medical expenses, lost wages, and non-economic damages.
  • Make a settlement demand. Most (but not all) demand letters include a specific amount.
  • Include a deadline for legal action if you want to, but don’t bluff. You have to be ready to file a lawsuit as soon as the deadline passes without a response.
  • Include supporting documentation, such as police reports and medical bills.
  • Keep your letter as short as possible, but not too short. Your letter should be just long enough to convey the necessary information, but not any longer.

The insurance company will most likely respond with a “reservation of rights” letter. A reservation of rights letter simply asserts that the insurance company reserves the right to deny your claim if it has no merit. This is a perfectly routine part of resolving a personal injury claim.

Tips on Writing a Settlement Demand Letter

As noted above, the number one advice on writing a settlement demand letter is “Let your lawyer do it.” A personal injury lawyer should have rich experience writing settlement demand letters. In addition, a letter from a lawyer can help your claim through its intimidation value alone, especially if your attorney has a reputation for winning personal injury claims at trial. This might motivate the defendant to settle regardless of the contents of your demand letter.

Beyond this caveat, observe the following principles:

  • Use a polite and professional tone. You cannot intimidate an insurance adjuster; you can only make them yawn. A polite tone indicates professionalism, not weakness.  
  • Be concise and organized. The insurance adjuster probably has a stack of demand letters on their desk that could rival the thickness of the Miami Yellow Pages. This is important because you will need the adjuster to read all of your letter. 
  • If your lawyer didn’t write the letter, at least let a lawyer look it over before you send it. You wouldn’t want to write anything that the other side would twist around and use against you later.

Don’t forget to sign the letter in your own handwriting.

You Can Afford a Top-Rated Miami Personal Injury Lawyer 

Most Miami personal injury lawyers don’t charge by the billable hour. Instead, they wait until your case is over and charge you according to a pre-agreed percentage of your compensation. 

In the unlikely event that your claim’s value turns out to be zero, your attorney’s fees will also be zero. Add to that the fact that personal injury lawyers charge no upfront fees, and you will understand why it is the strength of your claim, not the thickness of your wallet, that matters most.