how to write a demand letter for settlement

What is a settlement demand letter?

A Settlement Demand Letter is a written offer addressed to a claimant in a dispute. Typically, the claimant has previously sent a demand letter requesting payment for injury or other damages. In the Settlement Demand Letter, a counteroffer is made to try to induce settlement before the matter ends up in court.

How to write a settlement letter?

This is a formal letter that should include: 1 A summary of the original incident with any factual disputes highlighted 2 Evidence to support the version of events provided in the Settlement Demand Letter 3 An outline of any relevant legal standards that apply to the matter 4 A settlement offer and terms/timeline for acceptance

What to include when offering a settlement?

Be specific when offering a settlement. Clearly indicate financial terms , the timeline for acceptance, and any conditions for this offer.

How to properly review a claim?

Remember that the claimant is responsible for establishing facts and law – even if the version of events detailed is correct, it does not necessarily follow that the monetary claims are supported by the law. Scrutinize the evidence and all relevant legal standards.

What is a settlement demand letter?

A settlement demand letter is a letter in which the writer expresses their willingness to settle a case out of court and offers a settlement. You might write a settlement demand letter if you have received a claimant’s demand letter and wish to respond with a settlement counteroffer. This letter is a written response to ...

What to do when a claimant sends a demand letter?

Offer a Reasonable Settlement. When a claimant sends a demand letter, they ask for a larger amount of money than they expect to receive. Their demand letter opens negotiation. Your settlement demand letter continues that negotiation. Offer a smaller amount than the claimant demands but large enough to tempt the claimant to settle out of court.

Why Offer a Settlement?

Settling a case out of court can save you money, time, and stress. Because a court case can be long-term and expensive , you might decide to settle even if you disagree with the claimant’s version of the incident that caused their loss. A settlement demand letter allows you to express your disagreement and offer a lower settlement amount.

How to negotiate a settlement offer?

Discuss the Terms of Your Offer. Clearly outline the terms of your settlement offer. Often settlements require confidentiality agreements and a stipulation that both parties will release any legal claims arising from the incident. Include a time frame for the claimant to accept the offer. Be sure to include the date the offer expires in your letter.

How to dispute a claim in a letter?

In the body of your letter, dispute the claim and offer your perspective of the incident. Backup your viewpoint with evidence, such as a police report. Enclose a copy of any evidence you discuss in your letter.

Why do you settle out of court?

Note: You might decide to settle out of court because you are not required to admit guilt to offer a settlement. You can deny responsibility for the incident and still offer to settle. Offering to settle might be preferable to a court case in which a jury determines your guilt or innocence.

What is harmful in writing a demand letter to the insurance company that is too long?

What is harmful in writing a demand letter to the insurance company that is too long? Probably no harm, if you are representing yourself. But if you are an attorney, writing an inappropriately long demand letter that is very disproportionate to the size of the case sends an “I’m an inexperienced lawyer, and I have no idea what I’m doing” alarm. The insurance company will sense that you are out of your depth and will never take the case to trial.

What is the purpose of an insurance adjuster letter?

For all of their failings, insurance adjusters do a solid job of pulling out the critical facts in a demand. The most important part of the letter is explaining why your case is worth more than the adjuster thinks and worth more than cases with similar medical treatment, bills, etc.

What happens if an insurance adjuster does not know the lawyer?

If the insurance adjuster does not know the lawyer or if the victim is representing herself, they tend to discount your bluster. There is no getting around this. But giving them proof that you are all talk is going to be fatal to your effort to maximize the value of your claim.

How to avoid punitive damages?

Avoid using incendiary language or making wild threats. Do not suggest the possibility of punitive damages unless you are sure your jurisdiction allows them in your particular case. Insurance adjusters deal with over-the-top tough guys every day. They are immune to it. Be clear, be resolute, but check your hyperboles at the door. Lawyers who talk like this are the least likely actually to mean it and every insurance adjuster knows it.

Why is writing a treatise dangerous?

If there is something about your case that makes your claim more valuable, make it clear. This is another reason why writing a treatise is dangerous - you bury what really matters. If you missed your daughter’s wedding because of the accident, or you were a marathon runner who can no longer run because of a herniated disc , this is something you need to effectively communicate to the insurance company.

What happens if you don't file a lawsuit?

Why? Because if the insurance company knows you will never file a lawsuit, it will expect you will take any settlement you can get.

Is making a demand a mistake?

Unless you really know what you are doing, making a demand is a mistake. You are either going to make a settlement demand that is too high or too low. Either is a catastrophic mistake. You can mitigate your risk by letting the insurance company make the first move. 6.

What is a demand letter for insurance?

A demand letter is a factual summary of your claim, which includes all injuries (major or minor), loss of wages, emotional trauma (if applicable), and property damage.

When Should You Send Your Demand Letter?

You may want to know when is the best time to send a demand letter. A lot of people send their demands right after the accident/incident occurs, which usually results badly. Here is the reason why. If a demand letter is sent too prematurely, then you won’t be able to list all your damages and expenses. Always wait to give your letter to the insurance company after your medical condition is stable and your doctor has given you a long-term outlook on what your health will look like in the future. After doing this, you will have exact estimations of your present damages and future ones.

What You Should Consider Before Drafting Your Letter?

Before drafting the demand letter, there are certain questions you must be able to answer; as they will help you compel a strong argument.

What is the Proper Structure of a Demand Letter?

A demand letter should be broken down into three separate parts. In this section, the elements that should be included in the heading, the body, and the conclusion of the letter will be explained.

Is There Anything That Should Not Be Included in the Letter?

Yes. There are certain things that a demand letter should not contain. Earlier in the article, a few things we discussed such as poor grammar, typos, and dramatics. Here are two other things that you should never write in a demand letter.

What to Expect After Sending the Letter?

The waiting game is always the worst! You never know how the insurance company is going to respond. Here are three practical realities to look forward to after your demand letter has been sent. One, the insurance company accepts your offer and decided to go ahead and settle the claim. Truthfully, most insurance companies want to get done with your settlement as soon as possible. The longer the claim drags out, the more resources are extended to it; while they also have other claims to tend to. Two, they may decide to refuse your demand and counter offer another settlement. It may sound daunting, but all hope is not lost in this scenario. That is the importance of setting your total demand higher than the exact amount to prepare for counter offers. Three, the insurance company may not respond at all to your letter. Yes, even though you clearly listed your expected response time they may just ignore your letter. Why? Because legally there are no laws to enforce them to respond to it. In this case, don’t worry! Consider you can at this point file a lawsuit. The demand letter will still help to speed up the lawsuit, because everything has been clearly listed and documented with supporting evidence.

What information should be included in an insurance claim?

Insurance Company’s Information – Make sure to include the name of the insurance company, name of the adjuster/or medical examiner, their title, and the company’s address.