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3 Tips for Writing a Demand Letter to an Insurance Company

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After an accident, the repair bills and medical costs add up quickly. You need the insurance company to come through with a payment, but you may not be in a hurry to add attorney's fees to your already mounting pile of bills. And sometimes, it's not necessary to hire an attorney. If your case is very straightforward and the question of fault is cut and dry, you may be able to simply write a demand letter to your insurance company yourself, asking for the payment that you're entitled to. Take a look at a few tips that can help you write an effective demand letter.

Calculate Your Settlement

Before you can even begin writing your demand letter, you need to know what you're asking for. Obviously, you can't just pick a number out of the air. It's not quite as simple as just adding up all your bills and asking for compensation either, because you may be owed money for pain and suffering as well. But how can you determine just what the right number should be?

The simplest way to determine how much you should ask for is to use a personal injury settlement calculator. You'll add up your medical expenses, property damage expenses, and lost wages, and you'll estimate your future lost earnings and medical expenses and add those in as well. Then you'll multiply that number by a multiplier between 1.5 and 5.

The multiplier is the tricky part. That number represents your pain and suffering, and the more serious the accident and the longer-lasting the consequences of the accident, the higher the multiplier should be.

So, an accident that results in a simple wrist fracture that causes you to pay some medical bills, miss some work, and wear a cast, but that doesn't result in surgery or any long-term loss of motion in your wrist would probably be a 1.5, or close to that.

On the other hand, an accident that results in permanent paralysis or the loss of a limb would be a 5. Most cases fall somewhere in the middle, and you'll need to determine where yours falls. Keep in mind that the insurance company will probably argue for a lower number, and you'll negotiate until you find a middle ground.

Organize Your Letter

Once you've decided what you're asking for, it's time to organize your letter. If your letter is easy to read and progresses logically, it will be taken more seriously, and you're more likely to get a good result. Taking a little time to outline and organize your letter can make a big difference.

A simple way to organize your letter is to use subheadings that let the reader know exactly what you're covering in each section. For example, you might use titles like these:

  • Facts of the Case—a section for outlining the details of your accident
  • Medical Treatment—a section for explaining all of the treatments you have had and will have in the future, why you need these treatments, and what they cost
  • Property Damage—a section detailing the value of your car at the time of the accident and the cost to repair the damage
  • General Damages—a section for explaining your pain and suffering because of the accident

These are only a few suggestions, and you can adjust them so that they're applicable to your case. Don't forget to add an introduction and a conclusion as well.

Set a Clear Deadline

By sending a demand letter, you're offering to deal with the insurance company directly instead of going to court. Be clear that this offer is only temporary, and that if you don't receive a response, or if they make a counteroffer that is unreasonable, you'll file a lawsuit instead. Give a specific time frame for agreeing on a settlement—30 days, for example. You'll want to leave yourself time to find a lawyer and file a lawsuit if you can't come to an agreement with the insurance company.

How strongly you word this is up to you. You could say that if the matter isn't settled in the time frame you chose, you'll be consulting an attorney and filing a lawsuit. Or you can simply state that your offer to settle the matter directly is only open for your specified time frame—the insurance company will understand the implication that the other alternative is a lawsuit. What's important is that you make it clear that you know that you have that alternative, and that you're not going to wait around forever or accept an unreasonably low offer.

Even if you want to try writing your own demand letter first, it's not a bad idea to arrange a free consultation with an accident attorney in your area in the meantime. That way, if you're unable to settle the matter with the insurance company yourself, you'll already know where to go to take the next step. For further assistance on drafting the letter, visit resources like