Unless the Texas statute of limitations is about to expire for your personal injury case, your lawyer will likely begin negotiations with the insurance company by sending it a demand letter. Most accident and injury claims settle without going to court. If the deadline for filing a lawsuit is near, your attorney might file the personal injury lawsuit and follow up with a demand letter to settle the claim before trial.

What is a Demand Letter?

Demand letters are used in many personal injury cases to settle the claim without going to trial. The letter contains a legal demand for compensation for damages by the at-fault party. When the party who caused your injury has insurance, the demand letter is sent to the insurance provider.

Your personal injury lawyer and the insurance company negotiate a settlement based on the facts of your case. If a settlement cannot be reached, your lawyer may proceed with a lawsuit to hold the at-fault party legally liable for your damages.

A demand letter can be used to settle claims related to defective products, premises liability, workplace injuries, motor vehicle accidents, construction accidents, and other incidents of personal injury. The demand letter is the signal to the other party that you are willing to negotiate a fair settlement for your claim.

Do I Need an Attorney to Draft a Demand Letter to the Insurance Company?

Before you draft a demand letter for your personal injury case, there are two things that you need to understand about demand letters.

A Demand Letter Must Be Crafted With Careful Attention to Detail

First, what you say in the demand letter could hurt your chance of receiving the full value of a personal injury claim. An innocent error or mistake could be used against you during negotiations or at trial. A comment in the letter could be taken out of context to claim that you contributed to the cause of your injury.

For example, you state that you thought a product “looked odd” when you took it out of the box, but you used it anyway. The defense could claim that you contributed to the cause of your injury by going ahead and using a product that you knew was damaged.

If the jury agrees, your compensation is reduced by the percentage of fault assigned to you under Texas contributory fault laws.

Demand Letters Tend to Lead to Settlement Negotiations – and Put an End to the Claims Process

Second, a demand letter could result in a settlement agreement. Settlement agreements are binding contracts that end your personal injury claim. You agree to accept a specific dollar amount to release all claims you have against all parties involved in the incident.

Before you sign a settlement agreement, check with a personal injury lawyer to ensure you receive all the compensation you are entitled to receive. You cannot go back and ask for more money after you sign the settlement agreement.

What Does an Attorney Include in a Demand Letter?

A demand letter is tailored to your case. The information in the letter is designed to convince the insurance company that it is legally liable for your claim. The letter also demands full compensation for all damages.

While each demand letter is different, there is specific information that attorneys include in the letters, such as:

  • A description of the accident and a summary of the facts in the case
  • A discussion of how the at-party caused your injuries
  • Legal discussion of how the facts of the case support legal causes of action for liability
  • A detailed description of your injuries 
  • Letter from your doctor detailing your injuries, including your pain, suffering, permanent impairments, and prognosis
  • A description of the medical treatments you received because of your injuries
  • Discussion of how the accident, your injuries, and the medical treatment impacted your daily life
  • A detailed accounting of all medical expenses, out-of-pocket costs, and loss of income incurred because of your injuries
  • Explanation of future loss of income, diminished earning capacity, ongoing personal care, or future medical treatment required
  • Documents support your claims and proving your damages
  • Description of the pain and suffering you experienced
  • A demand for a specific dollar amount to compensate you for your damages and losses

The insurance company should respond by denying or approving the demand. It could also make a counteroffer for a lower settlement amount. If your lawyer receives a counteroffer or denial, he will discuss your legal options. 

In many cases, the lawyer asked for a higher amount than he expects to receive for your injury. By doing so, he leaves room to negotiate an amount that is fair and just based on the facts of your case. 

If negotiations fail or the insurance company acts in bad faith regarding the claim, your lawyer can proceed with a lawsuit to protect your best interests.