By: Armada Law LLC July 19, 2023

How Long After a Demand Letter Can I Expect a Settlement?

What Is a Demand Letter?

A demand letter is a formal written document an attorney may write on behalf of their client and send to the party who may be financially responsible for their client’s damages. It outlines the details of the incident, describes the extent of the client’s injuries and damages, and states how much compensation the client wishes to receive.

In other words, a demand letter serves to formally notify the responsible party of their legal obligations and allow them to settle the matter before escalating it to court.

For example, suppose you’ve been hurt in a car accident. One of your options to recover compensation is to write a demand letter to the at-fault driver’s insurance when initiating your personal injury claim, explaining what happened and why the other party was at fault. In the demand letter, you can also include clear information about your injuries, the damages you may have sustained after the accident, and the compensation you want to receive. You may also include supplemental documents as evidence for your claim, such as police reports and medical bills.

Is There a Deadline to Receive a Response to a Demand Letter?

While most insurance companies may respond to a demand letter within a few days or a few weeks of receiving it, there is no legal deadline for the insurance company to respond to your letter. It is usually in their interest to close any claims as quickly and efficiently as possible, especially once you have formally notified them that you have retained an attorney to represent you and may be taking legal action against them if no settlement agreement is possible. It helps to include a reasonable deadline when sending a demand letter, though there is no guarantee you will get a response by that date.

Generally speaking, each personal injury case is unique, and several factors may cause some insurance claims to move more quickly than others. For instance, the insurance company may take a lot more time to investigate a more complex case due to the claimant’s severe injuries and the higher amount of compensation the claimant may be seeking.

There is one deadline to which you will want to pay attention. If you plan on taking legal action and filing a lawsuit to recover compensation, you must be aware of your state’s statute of limitations for personal injuries. For example, personal injury victims in South Carolina have no more than three years to begin a lawsuit, counting from when the accident occurred.

So, while the insurance company is not required to respond to a demand letter within any particular deadline, you may consult a personal injury attorney if you believe your case has been pending for too long and you are approaching the 3-year deadline. This is crucial because once the statute of limitations expires, you won’t likely be able to receive any compensation for your medical expenses, lost wages, property damage, out-of-pocket financial losses, or other damages incurred.

What Happens After the Insurance Company Receives My Demand Letter?

Once the insurance company receives your demand letter, they may take some time to review your case, examine the evidence provided, and, in some cases, investigate your claim. After that, they may respond to your letter, letting you know if it was denied or accepted. They may also respond with an offer or request for evidence.

Denial

If the insurance company believes you do not have a valid claim or their policy does not cover the damages you seek, they may deny your claim. If they deny your claim, the insurance company will usually explain their reasons for the denial. You can also request a written justification of the denial if they do not provide one.

Offer

Sometimes, the insurance company may respond to your demand letter with an offer to settle your case. The amount of their offer is usually lower than the amount you are seeking. You are not obligated to accept their offer and should consider reviewing it with an attorney before deciding. You can also engage in the negotiation process with the insurer, though again, an attorney will be better poised to investigate and calculate the estimated cost of your damages.

Request for Evidence

When the insurance company believes that they do not have enough information, they may respond to your letter requesting further evidence to support your claim and document your damages. They may ask for medical records, photographs, or witness statements. It is crucial to provide the requested evidence promptly and accurately to avoid further delays on your claim.

Acceptance

The best possible outcome is receiving a positive response from the insurance company notifying you that they have accepted your demand letter. This can happen if they agree with all the details and evidence you provided in your letter and are willing to offer you a settlement.

Factors That Can Influence the Duration of the Settlement Process

If you have a personal injury claim that is either rejected in the claims process or does not produce a fair settlement, your personal injury lawyer will send a demand letter to start your lawsuit. Once your personal injury lawyer sends the demand letter and there is a response, the length of time until you receive a settlement can vary based on various factors:

Clarity of Liability

Your case may require more scrutiny before settlement negotiations can begin. Insurance carriers need to determine liability, and they will assign an insurance adjuster to investigate. Things can become more complicated with shared fault under the law, which is why it is ideal to seek legal assistance from an attorney with the legal knowledge to navigate your claim.

Type and Severity of Injuries

In cases, where an injured person requires several medical treatments, delays commonly arise. When a lawyer sends a demand letter, they typically wait until it is determined what future treatment may be necessary. An experienced attorney will not begin this process until you have reached maximum medical improvement to ensure that your long-term care needs are properly assessed for your settlement.

Insurance Factors

Insurance carriers may cause delays related to policy coverages or to stall for time. Your attorney can help avoid unnecessary delays through a strong demand letter that makes them take action. Insurers would rather settle than risk incurring higher court costs, though they may try to delay the process, especially if you have not yet hired an attorney.

Settlement Negotiations

The negotiation process may take time simply because your attorney will want you to get a fair settlement. You may need to wait until your medical records show your full course of treatments. Additionally, your settlement offer may not be sufficient enough. When you are the injured party harmed by another person’s negligent actions, it may be difficult to wait; however, it may be worth the wait to get compensation for the lost wages and other damages from the accident caused by the at-fault party.

Court Delays

South Carolina courts may be inundated with cases, which may mean you need to wait a few months for the trial. In that time, a settlement may be reached. However, if there is no agreement with the other party, the delays by the courts can also increase the duration of time until you receive your settlement.

What Should I Do if I Receive No Response to My Demand Letter?

If you have not received a response after sending a demand letter within a reasonable time, you can contact them to ask for an update. If you feel like the insurance company is still not responding or acting in bad faith, you may want to contact your attorney to learn your options and see if taking legal action is the right choice for your case. If you need a strong legal ally to help you receive compensation for your injury, call Armada Law for a free consultation. We can represent clients involved in any type of personal injury accident and fight for maximum compensation on their behalf.

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