Sending a demand letter is a crucial step to kickstart the process of seeking compensation for an injury. But how does a demand letter work, exactly? Our attorneys explain how sending a demand letter works, how long it may take to get a response, and what you should expect along the way.
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, the purpose of a demand letter is 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 explaining what happened and why the other party was at fault. 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 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.
Generally speaking, each personal injury case is unique, and several factors may cause some 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 an 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 damages.
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.
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.
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.
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.
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.
What Should I Do if I Receive No Response to My Demand Letter?
If you have not received a response to your 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 at 866-847-0766. We can represent clients involved in any type of personal injury accident and fight for maximum compensation on their behalf.