After a car accident, most people file a claim against the other driver’s auto insurance. At some point, your attorney and the attorneys for the insurance company will begin settlement negotiations. This process begins with a demand letter. This letter plays a key role in shaping how the claim proceeds.
This article explains what a demand letter is, what information it typically contains, and how insurance companies usually respond. It also explains how an Alabama personal injury attorney can help.
What Is a Demand Letter?
A person who is injured by another person’s negligence is usually entitled to damages. Damages are money that the law gives injured people to compensate them for the economic, physical, and psychological losses caused by the accident. A settlement happens when both sides agree on the amount of damages that the injured person should receive.
A demand letter is exactly what its name says – it is a letter that contains a demand. More specifically, it is a letter that a personal injury attorney sends to another lawyer or insurance company. The focus of the letter is the demand. The demand is the amount of damages the attorney is requesting on behalf of their client.
When Is the Demand Letter Sent?
In most cases, the attorney will not send the demand letter until the injured person has reached “maximum medical improvement (MMI).” At this point, doctors have a good idea of how well the injury has healed and whether further progress can be expected. They also know whether further treatment will be necessary.
While finances can be tight after an accident, sending a demand letter before the injured person reaches MMI would be a mistake. An early demand likely won’t account for future medical expenses or future lost earnings.
What Information Is Included in a Personal Injury Demand Letter?
Every case is different, but most demand letters contain several key components.
First, the letter typically includes a summary of the accident. This usually involves a summary of how the crash occurred and why the other party is legally responsible.
Next, the demand letter outlines the accident injuries. Note that in addition to physical injuries, the letter may also mention mental and emotional injuries to support non-economic damages such as pain and suffering.
Finally, the demand letter is part of a larger “demand package.” The package contains evidence to support the claims, such as medical records and bills, photographs, wage-loss documentation, and accident reports.
Beyond starting the settlement process, the demand letter proves that the injured person has evidence to support their claim. Strong evidence can influence later settlement negotiations. Demand letters also set the tone for future negotiations. No matter when the case settles, the number in the demand letter will usually remain relevant.
How Insurance Companies Respond to Demand Letters
Insurers typically respond to a demand letter in one of the following ways.
Rarely, the insurer may receive the demand and agree to it immediately. While this doesn’t happen often, it can, especially in cases involving clear facts on who was at fault and damages exceeding the insured’s policy limits.
More often, the insurance company responds with a counteroffer. In this scenario, the insurer agrees that some compensation is appropriate but disagrees with the amount requested. So, they will respond with what they believe is a more suitable number.
Sometimes, the insurance company will request additional information, such as updated medical records, proof of lost wages, or clarification regarding future treatment needs.
Finally, the insurance company can deny the claim. This often happens because they believe that you were the true cause of the accident or even a small part of why it happened. Alabama law – specifically the contributory negligence rule – allows them to deny on these grounds. Similarly, the insurer may claim that the injuries were not caused by the accident but were the result of a pre-existing condition. An experienced Alabama personal injury attorney can help you fight the denial.
What Happens if There Isn’t a Settlement?
A demand letter does not guarantee a settlement. If settlement discussions fail, the claim may continue in several different ways.
Most often, the parties continue negotiating. In some cases, new evidence or further discussions can help the parties reach an agreement.
Another option is mediation. A mediator is a neutral third party who is trained in helping opposing sides come to an agreement. Some disputes are resolved through mediation. The mediator may be able to help each side find a number that they can accept.
If negotiations, mediation, and other techniques ultimately fail, the injured person may decide to file a personal injury lawsuit. The case will be scheduled for trial, but the parties usually continue settlement discussions.
How an Alabama Personal Injury Lawyer Can Help You Make a Demand
Preparing a demand letter may seem straightforward, but doing it properly requires significant investigation and documentation. An experienced Alabama injury attorney can investigate your claim, gather evidence and records, calculate damages, and then prepare the demand letter and package. If a fair settlement cannot be reached, the attorney can also take the case to trial.
If you were injured by another person’s negligence, you likely have the right to demand compensation. If you need help getting compensation after an Alabama accident, contact Collins Law, LLC. Our team will keep you updated on every step of your case. To schedule a free, no-obligation consultation with our Birmingham or Madison team, call 205-588-1411 or use our online contact form.
