When drafting a settlement demand letter for a client, you run the risk of revealing both your inexperience and your litigation strategy to the responsible insurance carrier. Follow the rules below to craft a settlement demand letter that puts your client and you in the best possible negotiating position.
Avoid Premature Settlement Demands
Settling out of court is the easiest way to win damages for your client. However, if you send a settlement demand letter too soon, you may inadvertently deny your client all of the damages to which they’re entitled.
Ensure that you have a full and complete record of the client’s personal injury before you draft your settlement demand letter. Obtain the following documents to bolster the merits of your client’s claim:
- All medical records for treatment, medication, and therapy
- Copies of relevant statutes, building codes, and ordinances
- Copies of police reports and/or incident reports
- Photos of the injury scene
- Photos of physical injuries from date of loss to present
- Proof of lost wages
- Names of potential witnesses
You don’t need to include all of the above supporting documents with your settlement demand letter. However, the listed documents help you organize your case and draft a settlement demand letter that covers the important financial and liability components of the case.
Send Demand Letters to the Right Carriers
When there are multiple related insurance companies representing the liable parties, know which carrier is the primary insurer. Your settlement demand letter is worthless if you send the correspondence to the wrong company.
When you don’t know which are the primary and secondary carriers, draft settlement demand letters to each carrier. Tailor the letters for each individual carrier. The responses you receive will tell you which insurance company is assuming primary responsibility for the personal injury claim.
Format the Letter Correctly
A settlement demand letter must be formatted correctly if you want it to be taken seriously. Under your letterhead, type the following information as listed and in the same format:
- Date of the settlement demand letter
- Addressee’s name (call carrier to learn adjuster’s name)
- Job title of addressee (for example, Claims Adjuster)
- Carrier company name
- Carrier street address
- City, state, and zip code of carrier
- Re: Your Insured, Defendant’s Name
- Claimant: Your Client’s Name
- Claim Number: (only include if you know the number)
- Date of Loss: (state the date when the injury occurred)
When you format the top of your settlement demand letter using the above template, your correspondence looks professional and immediately alerts the claims adjuster to the relevant personal injury.
List the Specifics of the Injury in the Body of Text
Begin the text of your settlement demand letter by reminding the claims adjuster of any previous contact you’ve had about the case in question. Follow the brief introduction and reminder of the case with a chronological list of specifics about your client’s injury and exactly how it occurred.
Use dramatic language to outline the medical specifics of the case, but don’t sensationalize the injury. For example, state that the client’s arm was shattered instead of saying the arm was broken.
List the medications and treatments provided to your client to show that medical professionals consider the injury to be a serious health concern. Note any ongoing pain and suffering your client is experiencing, even if your client has returned to work.
Include information about your client’s lowered quality of life due to their injuries. For example, you can state that the client is not able to attend their grandchild’s sporting events or church services because of their pain and suffering or other injury-related condition. Mention any scars or loss of mobility that will affect your client’s lifestyle in the future.
State any relevant statutes, ordinances, and laws that the defendant violated. These violations may include building codes, driving laws, or OSHA rules. If the defendant caused similar injuries or violated similar rules in the past, state the facts that you can prove about their past transgressions. Alert the carrier if you have witnesses who can back up your claims about similar past injuries or violations.
Show All Losses Suffered by Your Client
After you detail the specifics of the personal injury event and the defendant’s liability for the injury, include a complete, organized list of your client’s losses. Begin with a compilation of doctor and/or hospital bills and any related costs for medications, medical equipment, and therapy.
Next, include details about your client’s loss of wages and potential loss of future income due to the injury. If the injury has impaired your client’s working abilities, include statements about your client’s present and future injury-related restrictions in performing their former job tasks.
Never discuss the weaknesses of your client’s case in your settlement demand letter. Your letter is far more persuasive when you write your letter with a clear, strong message of the defendant’s wrongdoing.
When you know the carrier’s liability limits, complete your letter with the demand for a specific sum. Some personal injury attorneys demand a specific settlement sum even when they aren’t aware of the insurance company’s maximum limits. Other attorneys avoid demanding specific settlement amounts in their settlement demand letters. They let the carriers answer their demand letters with initial settlement offers.
When you follow the above drafting tips, you lay out your client’s claim in the best possible way. Your settlement demand letter is easy to scan, covers all of the bases, and informs the carrier that, if necessary, you have an organized, well-planned case to bring to court.