By Francis M. Smith
If seeking compensation for injuries you suffered in an accident were a chess match, the demand letter you send to the other party’s insurance company might be the opening move. In this letter, your attorney lays out the facts of the case: the circumstances of the accident and why the insurance company’s client was at fault; what injuries you suffered and the costs of the treatment those injuries required; any other expenses and financial losses following from your injuries; and a description of the harm your injuries have caused you beyond the financial, for which you are also entitled to compensation. But what happens if the insurance company decides that their best move is not to play at all – if they offer no response whatsoever to your demand letter? The response to a demand letter is meant to open negotiations over an injury settlement, and the absence of a response leaves you and your attorney arguing with thin air. So what can you do in this case?
Generally speaking, insurance companies will pursue whatever strategy in dealing with injury claims that they believe is most likely to result in the least cost to themselves. Sometimes this means a quick resolution and the offer of a settlement check, because the insurance provider doesn’t want to risk a sympathetic jury awarding the injured plaintiff a much larger sum in damages. (Sometimes with a limited policy limit for their insured, they worry that a verdict in excess of the policy limit may expose them to paying more than they contracted for.) However, occasionally an insurance company will conclude that they can avoid paying anything at all to an injured claimant simply by ignoring them and hoping they get discouraged and give up. This is most likely to happen to injury victims who try to take on the insurance company alone, rather than working with an experienced injury attorney, or if the insurance provider believes that the injured plaintiff or their lawyer will be reluctant to follow through and take the case to court. This is because, in the absence of the settlement negotiation that would normally follow from a response to your demand letter, a lawsuit is the only option remaining as a means of obtaining compensation – and it’s one that cannot legally be ignored.
If your attorney has sent a demand letter and has been met with a stony silence in reply, your next step should be to check in more directly with the insurance provider to establish whether they ever actually received your correspondence. While unlikely, it’s possible that your demand letter got lost in the office mailroom, or left on the desk of a claims adjuster who is out sick with bronchitis, or maybe you mis-copied the address and sent your letter to the wrong branch office. Regardless, you or your attorney should phone the insurance company’s claims department and inquire as to whether your demand letter was received. If it was not, you now have the opportunity to verify administrative details like claim numbers and mailing addresses before sending another copy of the letter. If you receive confirmation that your letter was received, ask for an estimated time frame in which you can expect a response. Should the claim representative’s reply be evasive or unreasonably long, or should you not receive a response in the promised amount of time, you can conclude that you’re being ignored. Remember, by agreeing to insure, the insurance company has basically said: we will provide you with a lawyer if you are sued.
If you determine that the insurance company is deliberately ignoring your demand letter, it’s time to follow through. Your initial demand most likely included a statement of your intent to sue if the insurance company refused to compensate you for your injuries. Your attorney may recommend sending a final demand notice, informing the insurance company that they have seven days (or some other somewhat reasonable number) to respond before you file suit against them. After this, your attorney keeps that promise and files the initial paperwork that will begin your lawsuit.
Once the tort proceedings have been initiated, the insurance company sometimes suddenly discovers that it actually wants to negotiate with you after all. You’ve demonstrated that ignoring you will not cause you to disappear, and they will have to recalculate their minimum-cost assessments. This will may lead them to the conclusion that settling with you is less risky than letting a jury decide how much compensation you deserve. If the insurance provider reaches out at this point with an offer to negotiate, great. Your attorney can proceed with negotiating your settlement as if the initial snub had never happened; just because you’ve started a lawsuit, that doesn’t mean you’re locked into resolving the matter in court. You have the power to agree to a settlement offer and drop your lawsuit any time before a decision is rendered. The important thing is making sure to initiate your lawsuit before the statute of limitations (usually two years for injury claims) lapses, to ensure that you do not lose your right to sue for compensation. There is another, equal possibilty, though: the insurance company may be ignoring you and your attorney because they wish to drag out the settlement process as long as possible. There are some companies that only seem to want to deny, delay, and defend claims, no matter how obvious the liability or injuries. They pay defense attorneys flat fees or employ overworked "house counsel" (insurance company-employed attorneys) to take a case to the courthouse steps or even to jury verdict before paying. Your experienced personal injury attorney will be able to guide you through the process in every situation presented and keep you informed regarding the progress of your lawsuit. It pays to remember that whatever you have heard fromn your friend, or neighbor or cousin, each case is different with different facts, different injuries, and different dynamics (like insurance companies!) at play. So listen to your attorney and don't get impatient.