Settlement Demand Letter Checklist and Template: How to Write a Demand Letter to an Insurance Company

What a demand letter does, and when to send it

The demand letter checklist: 13 things the letter must contain

Each item answers a question the adjuster will ask when valuing the file; if the letter does not answer it, the adjuster answers it in the insurer’s favor. Print the list and tick each item before sending.

• Claim number, policy number, date of loss and the parties

  Your name, the insured’s name, the claim and policy numbers, and the date and place of the incident, in the first lines, so the letter reaches the right desk.

• A short statement of the facts

  What happened, in order, in a paragraph or two, drawn from the report and your photographs rather than memory. Say nothing the evidence does not support.

• Why the insured is liable

  The duty owed, the breach, and how it caused the injury: a driver who ran a red light, an owner who left a spill on the floor for an hour. Cite the report and the witnesses, and answer the comparative-fault argument before the adjuster raises it.

• The injuries, by diagnosis

  Each diagnosis in the words the records use, when it was made and by whom. A herniated disc at a named level reads differently from “back pain”; claims software scores the code, not the adjective.

• The treatment history, start to finish

  Emergency care, imaging, follow-up visits, therapy, surgery, and the discharge or prognosis, each dated. Explain any gap with its reason; the timeline is how the adjuster judges severity.

• Medical specials, itemized and totaled

  Every provider, dates of service and amount, in a table ending in a total, with the itemized bills enclosed. Say whether the figures are billed charges or paid amounts; which counts varies by state.

• Future medical care, priced by a physician

  Where care continues after the demand, a treating physician’s written estimate of the care and its cost. A verbal prognosis is worth nothing in a claim file.

• Lost income, with proof

  Dates missed, rate of pay and the total, supported by pay stubs and an employer letter tying the absence to the injury; tax returns and invoices if self-employed. Add reduced earning capacity if a doctor has restricted your work.

• Other out-of-pocket losses

  Prescriptions, equipment, mileage to appointments, household help, and unsettled property damage, each with a receipt.

• The pain and suffering claim, in specifics

  What the injury took from your life, in facts rather than adjectives: the months of broken sleep, the activities stopped, the scar. A dated symptom journal writes this paragraph.

• The demand figure and the reasoning behind it

  One total figure for full settlement, with the arithmetic: economic losses plus the general damages figure and why it fits the injury. A number reasoned to is harder to dismiss than a number announced.

• A deadline for a written response

  A specific date, usually three to four weeks out, and what follows if it passes: counsel, a complaint to the state insurance department, or suit before the limitations date.

• The enclosures list and a reservation of rights

  A numbered list of every document enclosed, and a closing line stating that the letter is a settlement communication, may be revised on new information, and waives no claim or right.

If the letter covers only three items well: liability with evidence, specials with bills, and one reasoned number.

The demand letter template, paragraph by paragraph

A business letter with a table and an enclosures list, in the order below. Run the calculator first so the number in step six has a frame behind it.

1. 1

   The heading, subject line and opening

   Your address, the date, the adjuster’s claims address, then a subject block: insured, claim number, policy number, date of loss, marked “For settlement purposes only.” Then two sentences: you are presenting your claim for the injuries the insured caused on that date, and treatment is complete (or the prognosis is in writing), so you are in a position to resolve it.

2. 2

   The facts

   One to three paragraphs in past tense, in order, from the record: the report number, the citation, the road and weather, the store’s incident report or the animal-control record. Quote a witness only where the statement is enclosed.

3. 3

   Liability

   The insured was negligent because of the specific act, and that negligence caused the collision or fall. Meet the comparative-fault argument here with the evidence that answers it. Where the state applies strict liability, as many do for dog bites, say so.

4. 4

   Injuries and treatment

   A paragraph per phase of care, or a dated timeline, then the diagnoses and the prognosis in the treating physician’s words. The adjuster reads this part most closely.

5. 5

   Damages

   Two tables. Economic: each provider and its charge, future care with the physician’s estimate, lost income with the calculation, out-of-pocket costs, each row tied to an enclosure number. Non-economic: the specific facts about pain and limitation, ending in the figure you assign.

6. 6

   The demand figure, with the arithmetic shown

   Illustrative example, invented numbers, not a prediction for any claim: medical specials of $9,400 and lost income of $2,100 make $11,500 in economic losses; for a soft-tissue injury with four months of treatment and full recovery, the letter frames general damages at $14,100, one and a half times the specials, a ratio commonly cited for injuries of that kind, and demands $25,600 in full settlement. State each line, state the total once.

7. 7

   The deadline and the consequence

   Ask for a written response by a stated date and say what happens after it. Name the statute of limitations date if it is within a year.

8. 8

   The closing, signature and enclosures

   A sentence reserving all rights, your signature and phone number, and the numbered enclosures: report, photographs, records, bills, wage letter, future-care estimate, receipts. Send it tracked and file the receipt with your copy.

Mistakes that lower the offer

The patterns that move a valuation down, each avoidable.

• Demanding before treatment is finished

  The claim is priced on the injury as documented the day the letter arrives; later care goes unpaid unless it was estimated in the letter.

• A number with no arithmetic

  A single round figure invites a single round counter. A demand built from a table invites a discussion of the table, which is the discussion you want.

• Adjectives instead of records

  “Excruciating” scores nothing; a diagnosis code, a treatment date and a physician’s restriction do. Every sentence about the injury should point to an enclosure.

• Ignoring the fault argument

  If the facts leave room to blame you for part of the incident, the adjuster will discount the claim under your state’s fault rule. A demand that answers the argument first sets the terms.

• Overreaching on the figure

  A demand far outside what the injury and the policy limits support is set aside rather than negotiated. Leave room to move, but start from a number you can explain.

What happens after you send it

Take-home points

• Send the demand at maximum medical improvement

  When treatment has ended or a physician has written the prognosis and the cost of future care. Earlier prices an unfinished injury.

• Every claim in the letter points to an enclosure

  Facts to the report, liability to the citation and witnesses, injuries to the records, losses to the bills and the wage letter.

• One reasoned figure, with the arithmetic

  Economic losses totaled, general damages explained, one total demand, framed by the calculator before the adjuster frames it for you.

• A deadline with a consequence you will keep

  The only deadline that binds you is your state’s statute of limitations; calendar it the day you start writing.

• The reply is a starting position

  A low counter is negotiation; silence and stalling are the patterns state regulators define. Escalate on the pattern, not the number.