Your Case · 5 min read · Published May 2025
What Is a Demand Letter in a Personal Injury Case?
Before a personal injury case goes to trial — or even before a lawsuit is filed — most cases are resolved through negotiation. The demand letter is the formal document that kicks off that process. Understanding what it is, what goes in it, and how it affects your case can help you set realistic expectations and work more effectively with your attorney.
What Is a Demand Letter?
A demand letter is a formal written document sent by your attorney to the at-fault party's insurance company. It summarizes the facts of your accident, documents your injuries and medical treatment, calculates your damages, and states the amount you are demanding to settle the case. It is not a lawsuit — it is an invitation to negotiate. Most personal injury cases begin with a demand letter and are resolved without ever going to court.
What Does a Demand Letter Include?
A well-drafted demand letter includes: (1) A factual narrative of how the accident occurred and who was at fault. (2) A detailed account of your injuries, diagnosis, and treatment — supported by medical records. (3) An itemized list of economic damages: medical bills, lost wages, future care costs, and out-of-pocket expenses. (4) A description of your non-economic damages: pain, suffering, emotional distress, and loss of enjoyment of life. (5) The total demand amount — the sum you are willing to accept to settle all claims. (6) A deadline for the insurance company to respond (typically 30 days). (7) A statement that failure to respond may result in a lawsuit.
When Is a Demand Letter Sent?
Your attorney will typically wait until you have reached maximum medical improvement (MMI) before sending a demand letter. MMI means your condition has stabilized and your doctors can project your future medical needs. Sending a demand letter before MMI risks undervaluing your claim — you don't yet know the full extent of your damages. In urgent cases (approaching statute of limitations, policy limits issues), your attorney may send an earlier demand.
How Does the Insurance Company Respond?
The insurance company will respond in one of three ways: (1) Accept your demand and offer to settle for the full amount (rare). (2) Make a counteroffer — a lower number that begins the negotiation. (3) Deny the claim entirely, disputing liability or the extent of your injuries. Most cases involve back-and-forth negotiation after the initial demand. Your attorney will evaluate each counteroffer and advise you on whether to accept, counter, or file a lawsuit.
What Happens If the Insurance Company Doesn't Respond?
If the insurance company ignores your demand letter or refuses to negotiate in good faith, your attorney will file a lawsuit. In California, you have 2 years from the date of your accident to file (Code of Civil Procedure § 335.1). The demand letter deadline is not a legal deadline — it is a negotiating tool. But failing to respond can be used as evidence of bad faith, which may expose the insurer to additional liability.
Can I Write My Own Demand Letter?
Technically yes — but it is rarely advisable. Insurance adjusters are trained negotiators who handle hundreds of claims. A poorly drafted demand letter can undervalue your claim, omit critical legal arguments, or inadvertently admit fault. An attorney knows how to present your damages persuasively, anticipate the insurer's defenses, and set a demand high enough to leave room for negotiation while remaining credible.
Key Takeaways
- A demand letter is the formal start of settlement negotiations — not a lawsuit
- Send it after maximum medical improvement (MMI) for maximum value
- It must include all economic and non-economic damages with documentation
- The insurance company will typically counter — negotiation follows
- If the insurer doesn't respond in good faith, your attorney files a lawsuit
- An attorney-drafted demand letter consistently produces better outcomes
Frequently Asked Questions
How long does it take to get a response to a demand letter?
Most demand letters give the insurance company 30 days to respond. In practice, responses often take 4–8 weeks. Complex cases or high-value demands may take longer. Your attorney will follow up if the insurer is unresponsive.
Does a demand letter guarantee a settlement?
No. A demand letter starts the negotiation process, but it does not guarantee resolution. If the insurer disputes liability or refuses to offer fair value, your attorney will file a lawsuit. Most cases settle before trial, but some require litigation to achieve a fair outcome.
What is a policy limits demand?
A policy limits demand is a demand for the full amount of the at-fault driver's insurance policy. It is used when your damages clearly exceed the policy limits. If the insurer refuses a policy limits demand and you later win more at trial, the insurer may be liable for the excess judgment — a powerful incentive for insurers to settle.
How much should I demand in my letter?
Your attorney will calculate a demand that reflects the full value of your damages, with room to negotiate down to an acceptable settlement. Demanding too little leaves money on the table; demanding an unrealistic amount can stall negotiations. An experienced attorney knows the right range for your specific injuries and jurisdiction.