If you have recently been injured in an Atlanta or Fulton County car accident, slipped at a store, or experienced another type of personal injury, you may have heard the term “demand letter.” But what is a demand letter, and how does it affect your personal injury case?
This article provides detailed information on what a demand letter entails and what happens after it is sent to the insurance company. A well-written demand letter is an essential step in resolving your claim and avoiding the case going to trial. Understanding the legal details involved in sending a demand letter can provide the guidance you need to make informed decisions about your claim.
What Is a Demand Letter?
A demand letter is a formal written legal document sent by your attorney to the at-fault insurance company. The letter outlines your injuries, the damages you have suffered, and the specific dollar amount you are demanding in a settlement.
The demand letter is the initial move in settlement negotiations. Once the insurer receives the demand letter, it puts them on notice that you are seeking compensation. Your Atlanta personal injury attorney will typically send the letter once you have reached maximum medical improvement (MMI), so all of your damages are properly identified.
It is important to realize that a demand letter is not a lawsuit. Instead, it is used as a pre-litigation tool. If the insurer does not respond fairly to the demands outlined in the letter, your attorney may then file a lawsuit.
What Does a Demand Letter Include?
A well-written demand letter includes several critical legal elements, including:
- Factual narrative: A detailed account of the accident that includes the date, location, how the incident occurred, and who was at fault.
- Liability argument: Analysis of why the other party is responsible, including references to Georgia’s negligence law, findings in the police report, and traffic violations.
- Injury description: A detailed account of your injuries, medical treatment, prognosis, and their impact on your daily life.
- Medical documentation summary: Detailed list of treatment providers, dates of service, diagnoses, and total medical costs.
- Economic damages calculation: Past and future estimated medical costs, lost wages and earning potential, and out-of-pocket expenses.
- Non-economic damages argument: Supporting evidence that details your pain and suffering, loss of enjoyment of life, and emotional distress.
One of the most critical aspects of the demand letter is the specific dollar figure your attorney is requesting. Your attorney will use a common negotiating tactic by requesting a higher amount than what you expect to settle for. The letter will also include other supporting exhibits such as copies of bills, wage verification, and expert reports. The insurer will generally have 30 days to respond to the demand letter.
Why the Demand Letter Matters for Your Case
The demand letter acts as the anchor for your case. The opening demand amount sets the starting point for negotiations and can influence the final settlement amount. A well-crafted demand letter demonstrates preparation and signals to the insurer that your attorney is prepared for trial.
The demand letter also creates a legal paper trail. Everything included in the letter becomes part of the formal record and forces the insurer to respond. While the insurance provider is not legally required to respond, most insurers will do so upon receiving a demand. Ignoring a demand letter risks exposing the insurer to a bad-faith claim. Georgia’s bad faith statute, O.C.G.A. § 33-4-6, allows a claimant to pursue penalties if the insurer unreasonably refuses to settle a valid claim.
What Happens After the Demand Letter Is Sent?
Several possible scenarios often occur after a demand letter is sent:
- Scenario 1: The insurer accepts the demand and the settlement proceeds quickly. Although rare, an insurer may be willing to settle on the terms of the demand letter for small, clear-liability claims.
- Scenario 2: The insurer makes a counteroffer, which is the most common outcome. The negotiation phase then begins with back-and-forth offers. Your attorney then evaluates each offer against the strength of the case.
- Scenario 3: The insurer lowballs or denies the claim. Your attorney may respond with additional evidence or proceed with litigation.
- Scenario 4: The insurer requests more information. The insurance company may request additional medical records and that you submit to an independent medical examination (IME).
Negotiations after a demand letter is sent typically range from 1 to 6 months, depending on the complexity of the claim.
Should You Write Your Own Demand Letter?
Although technically writing your own demand letter is possible in small claims, it is not recommended for complex cases, such as those involving significant injuries.
One of the risks of a DIY demand letter is undervaluing your claim and failing to fully account for future medical expenses and non-economic damages. You could also fail to make critical legal arguments that strengthen your position, or make admissions that harm your case. If you set a low anchor, you lower your negotiating ceiling and potential settlement.
Advantages of Attorney-Prepared Demand Letters
Allowing an attorney to prepare a demand letter comes with several distinct advantages:
- Professionally formatted and contains proper legal language that insurers take seriously.
- A complete assessment of your losses, including future expenses.
- Strategic settlement demand based on experience with similar personal injury cases in Georgia.
- Indicates that you have legal representation and are prepared to pursue litigation.
Ready to demand fair compensation? Durham Law Group handles every step from demand letter to settlement. Contact us today at 404-845-3434 for a free consultation.
