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What Is a Demand Letter?

Posted on February 27, 2023

A demand letter is often sent when a claimant intends to try to resolve a claim with an alleged at-fault party before suing. At that point, negotiations for settlement will typically begin.

Why are Demand Letters Sent?

Below are some common reasons why you would need to send a demand letter: 

After a Personal Injury

Victims injured in preventable accidents often send a demand letter to begin settlement negotiations with the insurance companies of the at-fault parties. 

Someone Owes You Money

Another party owes you money either contractually or because of an error or unlawful activity on their end that resulted in financial losses for you. A well-thought-out demand letter in these cases can prompt the liable party to quickly pay if they know a lawsuit is next. 

Someone is Obliged to You in Some Way

An agreement is in place for one party to complete a job for you (e.g., install a new roof on your house), and they either failed to complete it, or there is a specific disagreement about what the second party was supposed to do. 

What is Included in a Demand Letter? 

An effective demand letter must be carefully drafted and will include who you are, how you were impacted by the other party, the damages (losses) you suffered, who is responsible for your them, and the amount of compensation you demand to resolve the claim. Before writing it, you will need an estimate of your case’s value and include supporting evidence. For example, in a personal injury case, photos of the accident scene and your injuries, medical bills and records, pay stubs or tax documents to show lost income, police reports, incident reports, eyewitness statements, etc.  

Do I Need an Attorney to Write a Demand Letter?

The language within a demand letter can be enough to convince an insurance company of the seriousness of your claim and motivate them to resolve it. Other times, it will only be the beginning of a long negotiation process. However, working with an attorney on your demand letter will significantly increase your chances of obtaining fair compensation. A lawyer can help with the entire claims process until its completion. This includes accurately estimating your claim’s worth, ensuring you have evidence to support it, and not settling for less than you deserve. 

Philadelphia Personal Injury Lawyer

How Long Does it Take for an Insurance Company to Respond to a Demand Letter? 

Most insurance companies respond to demand letters within 30 days, but unfortunately, that is not always the case. There is no way of knowing precisely how long an answer or counter-offer will take since they do not have a deadline. Therefore, if an appropriate amount of time has passed without a response, you and your attorney may choose to file suit. There is also the option to stipulate a deadline for a response in the demand letter but keep in mind that insurance companies move slowly, so at least 14 to 30 days. 
If you feel you are in a situation where you need to send a demand letter, schedule a free consultation with a skilled Philadelphia Personal Injury Lawyer today.