By Francis M. Smith
If you are handling your own personal injury claim, just about every effort to seek injury compensation from an insurance company begins the same way: by drafting and sending a demand letter to the insurance company. This letter initiates the settlement negotiation process and sets the tone for your interaction with the insurance company. Your demand letter is also the first impression that the insurance adjuster gets of how much you understand about your rights and how organized and well-prepared you are in dealing with your case. As such, it's important to make sure that your demand letter is composed well, in order to set the best tone for the negotiations going forward.
Your demand letter is your opening sally in the settlement negotiation process, so you want to present your case as strongly as possible. Without overstating or exaggerating, you should lay out your most persuasive and powerful arguments in support of your claim. Even if you're aware of potential weaknesses in your case, your demand letter is not the place to mention them; it's the insurance adjuster's job to figure out where any weak points in your arguments might lie. Don't do that work for him, especially not when you need to put the strongest face on your claim. If the insurance adjuster points out a flaw or weakness in your case later in the negotiation process, you and your attorney can address that issue when it arises, with the arguments that you've hopefully discussed and prepared for that purpose. (And if the adjuster never mentions a particular weakness you're aware of, there's no need for you to bring it up.)
In your demand letter, you should clearly outline your arguments regarding these points:
Why and how was the person or entity that the insurance company represents legally at fault for your accident?
What injuries did you sustain in that accident, and what medical conditions are you experiencing now as a result of those injuries?
What medical care did you receive in treatment for your injuries, and what was the cost of that care?
Were you unable to earn income for any period of time as a result of your injuries, and what was the total value of those lost earnings?
What other damages, including those that do not have a direct economic cost associated with them, did you suffer because of your accident and injuries? This can include physical pain and suffering, emotional distress and mental anguish, mental health conditions such as anxiety and PTSD, impaired ability to enjoy your normal activities, and loss of consortium (marital relationship).
At the close of your letter, state your demand as the lump sum that you will accept to settle the whole of your claim. If you have a personal injury attorney working for you, he or she will compose this letter. If you are doing it yourself, you will be factoring in all of your current and future medical expenses, your lost earnings, and the multiplier for your non-economic losses. However, you don't have to lay out your math in the demand letter; stating the sum that you expect is sufficient, and makes for a stronger case.
When the insurance company receives your demand letter, the adjuster will compare the information in it to the research he has done about your case and prepare a counter-offer, kicking off the back-and-forth of the negotiation process. Most of the negotiation will take place over the phone or through letters. If you have an attorney working on your case, there may be an arbitration process or a mediation session to try to get the case settled.
Some cases involve multiple liable parties, each with their own insurance company. For instance, a customer may be injured by a negligently-placed piece of landscaping equipment belonging to a grounds-keeping company contracted by a store owner. If your case involves two separate insurers, sometimes you will receive a notice from either or both insurance companies informing you which of them is providing the primary coverage for your claim. (Many times, both insurance carriers will tell you to negotiate with the other, making it impossible to settle the case.) If there is an agreement on which insurance carrier will by primarily responsible, this is the insurance company you will negotiate your settlement with, and the company you should send your demand letter; the other insurer may only be responsible for covering damages in excess of the first company's liability policy, if at all. If you have not received such a notice before you have calculated your demand figure, write letters to both companies, each addressing the negligent actions of that company's insured. In response, at least one of the insurers should inform you which company will assume primary coverage responsibility.
If multiple people were injured in the same accident, their relationship determines the best way to proceed. Members of the same family can choose to send a single demand letter that includes description of each affected person's injuries and damages, and state each of their settlement demands in separate paragraphs. Injured people without a family relationship will need to compose separate demand letters, though working together to prepare their cases is still a good idea.
It should be apparent from the above that the settlement negotiation process can be difficult for a non-professional to complete. I do not recommend that you do this except on the most minor claims. Most injuries of any severity merit the hiring of a qualified, experienced personal injury attorney to not only negotiate the case to settlement but to provide all the necessary proofs to the insurance representatives meriting fair compensation after an injury caused by the insured person or company. Even after fees and expenses, you are likely to be better compensated when an attorney represent you, compared to doing it yourself.
If you or a loved one have been injured in a serious accident, please contact me or call me at 908-233-5800 for a free consultation.