Want to Settle Your Own Accident Claim? Part 3 – The Demand

Settle Your Own Accident Case Part 3Having decided whether you should try to settle your own accident case (Part I) and gone through the preparations and document gathering needed to prepare your demand (Part 2), you should now be ready to draft your settlement demand letter. This will take some time, and you will need to review and refer to many documents, particularly your medical records, so don’t expect to knock this out in just a few minutes.

Writing a Demand Letter — Your First Settlement Offer

In theory, you could just call the defendant’s insurance company and tell them how much money you demand to settle your claim. This is not how lawyers do it, and for good reason. By presenting your first offer in the form of a demand letter, you get to present not only your initial settlement offer, but also the grounds for making such an offer in a well-thought-out, organized fashion. It lets the insurer know that you’ve actually put some thought into your offer and that you’re more sophisticated than the average “lawyerless” claimant. In other words, you are not someone to be messed with.

My suggestion for how to organize and present your demand letter is just that — a suggestion. You should consult other sources or buy a book and combine my advice with that of others to find an approach that works best for you. Here is how I suggest your settlement demand letter be structured:

The Claims Information Section: Between the insurer’s address and “Dear Sir or Madam”, you should have a block of information that quickly lets the adjuster know the following:

  • Name of Claimant: <your full name>
  • Name of Insured: <the name of the tortfeasor — either a person or business>
  • Policy Number: <the policy number of the tortfeasor if you have it>
  • Claim Number: <if the insurer gave you a claim number, enter it here>
  • Date of Loss: <the date of the accident>

The Introduction: In the first paragraph, you want to state that this is a time-limited demand to settle the above-referenced claim and that the offer to settle will lapse and be revoked unless you receive a settlement check in the amount demanded (don’t specify an amount here — wait until the end of the letter) within 30 days. Thirty days is standard for such a demand. It has the additional benefit in cases in which you are requesting policy limits of preserving your right to bring a bad faith lawsuit should the policy limits not be paid.

Give a very brief description of the accident, such as “the automobile accident which occurred on “X” date, or the “slip & fall accident which occurred in “X” store. You then state that “The particulars of the claim are as follows:”, and you begin your section-by-section description of the claim. For each of the following sections, I suggest you use the actual bold headings I provide in your letter so the adjuster knows how the claim is organized.

The Claimant: Here, you state your full name, age and gender (e.g., John Doe is a 35-year-old white man) and provide any useful information about yourself from prior to the accident, such as your occupation and the status of your health (e.g., . . . who worked as a truck driver for the past 10 years and was in excellent health). If you had no prior medical conditions, say so. If you did, here’s your chance to try to minimize their impact. You should disclose pre-existing conditions (the insurer will find out eventually), but you should distinguish them from the injuries you suffered in the accident (either you had fully recovered and this is a re-injury, or the accident exacerbated them) or state that they are unrelated to the injuries from the accident (e.g., you had a prior knee surgery, but you are not claiming a knee injury from the accident).

If you are married and/or have children, include that here. Feel free to include anything that humanizes you so that the adjuster may see you as more than a number (charity work, community activities, etc.) or anything that may be relevant to the claim that you are making (hobbies or sports that you like that you will later say have been affected by the accident).

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Description of the Accident: This is fairly self-explanatory, but I suggest that you only give the level of detail needed to convey the essential facts. If you were in a car accident, for example, you wouldn’t need to say where you had been or where you were going at the time of the accident. You don’t need to describe your emotions or what a horrible person their insured is. Think more along the lines of what appears in an accident report — the where, the when and the how.

Liability: Because this follows the accident description, this should just be a very short statement of why their insured is at fault for the accident. For example, “It is clear from the above description of the accident that your insured is 100% at fault and that there was nothing I could do to avoid the accident”.

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Injuries Suffered and Medical Treatment Received: This section is also fairly self-explanatory. Be thorough as to what parts of your body were injured. Include everything, not just the worst injury. Use your medical records (which you should have gotten before you started writing) to help you give a summary of the treatment and tests you received, as well as their level of success (keep it to a summary — you’ll be sending the medical records with your demand). Identify any prescription medications you have taken and if you will need to take them in the future. If this is an automobile accident case in a “no-fault” state, be sure to state which of your injuries, if any, are permanent.

When you’ve finished describing all of your past care, describe the types of future care you will need (according to your doctor). Include any drugs you will have to take, any physical therapy or follow-up doctor appointments you will need. If you will need to do daily exercises at home from now on to maintain your current level of functioning, include that as well.

Economic Damages: In this section you will describe both your past and future “economic damages,” which will mainly be your medical costs and wage loss. Use the information from your medical billing documentation to add up your health care costs. Be sure to include your drug costs (your health insurance info should help). Use the full amount the health insurer had to pay, not just your co-pay (don’t forget that you’ll have to pay back your health insurer). Remember to include the cost of all of your anticipated future medical care, including drugs you will need to take. If you’re not sure how much certain treatments will cost, this site may help.

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For your wage loss claim, include any “sick time” that you needed to use due to your injuries. If you lost your job, or had to take a less physically demanding job, include the total loss or difference in your pay going forward into the future as part of your future wage loss claim. Guesstimate if you don’t have exact numbers — just be reasonable in your estimation.

Finish this section by totaling your past and future economic damages (for easy reference). Say that your “future” economic damages figures are conservative and will likely be much higher if you have to litigate.

Non-Economic Damages: Your non-economic damages are your pain and suffering (physical) and emotional distress (mental) damages. Describe both the pain from the accident and from your medical treatment — it’s all recoverable. Describe your current level of pain and how you will have to live with that for the rest of your life. If your injuries put you at risk for future arthritis (many injuries do — ask your doctor) state this and describe how this will cause your pain to increase in the future.

Describe any physical limitations that you have now, such as lifting or range of motion restrictions. Identify some of the things that you used to love to do but can’t do now because of these injuries (playing with children, golf, bowling, etc.). If you’ve gotten depressed, especially if you’ve treated with a mental health care provider, include this information (don’t forget to include his bills in the economic damages section, either).

Finish this section with a broad figure that encompasses both your past and future non-economic damages. Make it a large number because this is where you will be padding your demand for negotiation purposes. Don’t be conservative at all with your number (but say that you are).

Demand for Settlement: This section is your summary, wherein you list the different dollar amounts for the economic and non-economic damages you’ve previously identified and total them into the final demand for settlement. If the number seems too low to you, go back and tweak some of your other numbers (but not the past medical or wage loss, as those are fixed), such as your pain and suffering or future wage loss.

Come up with a number that is far higher than you want to receive as your final settlement. Don’t be naive and think that you’ll impress the adjuster with your reasonableness. Adjusters know that initial offers are exaggerated and expect you to negotiate down from them. If you start off reasonable, you’ll be negotiating down from “reasonable”.

When you’ve finished your demand letter, have someone else proofread it for you (not medon’t even ask) and make sure it reads well. When you’re satisfied with the letter, send it, along with copies of all of your supporting documentation, to the insurer.

Special Notes for Car Accident Cases

Property Damage: If you were in your own car at the time of the accident, you probably also have a claim for the damage to your car. This should be handled by a different adjuster at the insurance company than the one handling your bodily injury claim, a “property damage” adjuster. As this article is already quite long (and getting even longer), I’m not going to address how to settle your property damage claim. You can buy a very cheap guide which shows you how to handle that aspect of your case by clicking this link.

You can handle your property damage claim immediately after your accident without waiting for your bodily injury claim to ripen. Just make sure that you don’t give any recorded statements to the adjuster (I’m assuming the accident report will state that the other driver was at fault). Inspections of your car are fine, and expected. Be sure that any release you sign as part of your property damage settlement does not release the insurer from your bodily injury claim.

Uninsured/Underinsured Motorist Issues: If you are sending a demand to an underinsured driver’s insurer (you’ll be demanding policy limits), to be safe you should make the settlement contingent upon the agreement of your own UM insurer. Just include a line in the final section of the letter stating that. In some states, such as Florida, if you don’t get the approval of the UM insurer before settling with the tortfeasor, you waive your right to collect UM insurance.

You can send practically the same demand letter to your UM insurer that you sent to the tortfeasor’s bodily injury insurer. Just add a section stating the policy limits of the underinsured driver and include a copy of the paperwork which supports those policy limits. When you make a settlement demand to your UM insurer, remember to deduct the policy limit amount of the BI insurer from the total settlement value. So, if your settlement valuation comes to $60,000.00 and the BI insurer has $25,000.00, you would demand $35,000.00 from the UM insurer (or its policy limits, if they are lower).

What Happens After the Settlement Demand Goes Out?

Mark your calendar to note the day your demand expires. Hopefully, you’ll hear from the insurer before then, either by mail or by phone, with either an acceptance of your offer or a counter-offer. If you do not hear from the insurer by the deadline, and think that you may have grounds for a bad faith case, you should call a personal injury lawyer and bring your demand package in for him to review immediately. If you don’t think you have a bad faith case, it’s up to you whether you want to contact the insurer to check on the status of the demand or just hire a lawyer.

Don’t try to trade numbers back and forth with the adjuster during a single phone call to settle your claim. Take some time to consider his counter-offer. Make notes about anything he identifies as weaknesses in your case, or reasons for not offering more money. Look into his claims and form counter-arguments before making a counter-offer of your own. Take your time and don’t try to rush things. Remember that smaller moves may make the process take longer, but they are safer.

Negotiating Tip: Often, parties trying to settle a claim use their offers to send a message to the other side about where they ultimately want the settlement to go. Pay attention to number in the middle of the two offers (e.g., if you’re at $50,000.00 and he’s at $10,000.00, $30,000.00 is the middle — just add the last two offers and divide that by 2). If the adjuster’s offers are increasing at a lower rate than your offers are decreasing, it means he’s trying to pull the middle number down.

Usually, parties to settlement negotiations want to get to the point where they can “split the baby” and reach a settlement. Keep this in mind when making new offers. If the adjuster isn’t moving enough, make your own moves smaller to send the message that you see the “ultimate settlement figure” as being higher than him. Note that this “middle seeking behavior” doesn’t really happen until after the first one or two offers, after your opening number has come down into a more reasonable range. So, don’t be too reluctant to make a large move in the beginning — it may be necessary to start talking real numbers. Use some of the padding you’ve built in to your offer to make that move.

When to Bail Out and Hire a Lawyer

If, after trading a few offers with the adjuster it appears that you two are on different planets when it comes to valuing your case, you may want to just have a lawyer take over before your offers get too low. You don’t want a potential lawyer to be boxed in by your lowest possible settlement offer, as it will be very difficult for him to ever negotiate higher than that (and he’ll have to if you want him to offset his fee in the process). Don’t jump just because the adjuster’s first offer is low — this is a natural response because your first offer will always be too high. You’re just going to have to use your instincts to tell you if it looks like the settlement isn’t going to reach a number you can live with, so you know whether you should press on or hire a lawyer. That’s just one of the burdens of trying to settle on your own. Good luck!

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131 Responses to Want to Settle Your Own Accident Claim? Part 3 – The Demand

  1. Lin says:

    I am a Pro se plaintiff. My case has very little medical expenses related to the case although I did list that in my complaint to cover co-pays, meds, etc that my insurance did not cover.

    My case is mainly mental, emotional stress, humiliation, discrimination… Nothing where I can show a specific amount.

    I initially asked for $200K although never expected that amount and willing to settle for a much lower amount. Defendant has not offered a settlement amount and I didn’t know what to ask for so I didn’t make an offer.

    Questions –

    If I collect anything will I have to repay Medicare and my private insurance company?

    If yes, Can I make a demand in my settlement offer that the defendant has to pay all of that?

    Or could/should I drop the small bit of medical expenses in a settlement offer since it is not the main issue? Although they did charge for services that were not provided and my ins paid them.

    We are in the middle of interrogatories. Is this too late to make a settlement offer? Or is this a good time? Should I wait till after depositions?

    What should my first settlement offer be? 1/2?
    (I would willingly settle for 1/4 or so)

    If I make an offer of a much smaller amount and we still end up at trial can the defendants bring this up and say that my case isn’t worth the original amount since I was willing to settle for a much lower amount?

    Early on in the case the documents said that we could go to the judge if we thought he could help us settle the case. Is that something I should do? If so would I make it a formal document (what would I call it/what format) or would I ask in a n informal letter to the judge?

    It also mentioned mediation. Is that something I want to consider?

    This has been an issue that the news wanted to check into. Should I not speak to the media? Speak to the media? Mention to defendants that I might speak to media? So far I have stayed away from that and don’t really want to go that direction but wonder how it would affect my case. Also, down the road it is something that I might eventually want to discuss in a public forum. How would that affect my case? Or should I just keep quiet no matter what?

    I filed my case without paying because I could not afford it and the judge approved my request of being financially indigent. (Don’t remember what it was called). If I settle will they want me to pay for all their legal cost? What if I lose when we go to court? I have nothing and I’m on disability. The stress of thinking about that possibility scares me and keeps me up at night. What usually happens in these type cases?

    Final question – defendants have objected to all but 2-3 of my interrogatories. Some of the info I need to prove my case is in their hands and there is absolutely no way for me to get access to that.

    What is my next step? Do I send something back to their attorney? What format do I use? Or do I go directly to the judge with a motion to compel?

    I have planned all along to go all the way to court if needed. My health has worsened since this began and the physical and emotional stress of keeping up with this has been more trying on me and I don’t know if I can continue to the end now. I don’t want to look desperate to the defendants. My current health issues could be very serious and much testing is being done.

    • fl_litig8r says:

      I’m willing to answer questions within reason, but you can’t just flood me with every question you have. I can’t be your shadow counsel. I’ll do my best to answer what you’ve asked, but just know that this is not an invitation to ask even more follow-up questions. The purpose of this site really isn’t to teach pro se litigants how to litigate.

      First issue (liens) — you can’t avoid a Medicare or health insurance lien by saying that those bills aren’t part of your case. If you settle, it will be considered a settlement of all claims, even ones you may not have stated in the lawsuit. If you go to trial and don’t get awarded any medical damages, that’s one thing, but if you settle it will be deemed to include the bills that Medicare or a health insurer paid. I wrote separate articles for Medicare liens and health insurance liens you may find helpful. Don’t expect the liability insurer to agree to pay some unspecified liens in addition to whatever it pays you, so if you were hoping to settle your part and make the liens “their problem”, prepare to be disappointed. You should figure out your own liens and make a settlement that gives you enough to satisfy them in addition to whatever else is fair to you.

      Second issue (settlement offers) — You can make a settlement offer whenever you want. It doesn’t really matter what stage of litigation the case is in, and it’s never too late (I’ve had settlement negotiations during a trial). I’m not going to tell you what amount to ask for. I wrote an article about valuing a case and that’s really the best I can do. I can’t value cases over the Internet based on what people tell me, without any access to records (which I wouldn’t be willing to review, anyway, because I’m not your lawyer). For all I know, the defendant may not be interested in settling at all, which often happens with pro se litigants, so agonizing over what multiple of what you actually want to ask for may be irrelevant. The fact that they haven’t responded to your initial offer with even a “nuisance value” offer doesn’t bode well. The only way you’ll know if the defendant is interested in talking settlement is to ask. If it is, then mediation might be helpful.

      Third issue (media) — This is an issue which really needs to be played by ear on a case-by-case basis. I can’t categorically say that it’s a good or bad thing to talk to the media if they’re coming to you asking questions. Without having a lawyer to monitor and shape what you say, it’s risky. I definitely would not threaten the defendant with it. That could be considered extortion. If you’re going to talk with the press, just do it — don’t threaten it first. I would explore whether the defendant is interested in settling before talking to the media. Again, don’t mention the press when you explore this possibility. The defendant could decide to dig its heels in a fight to “clear its name” if you go to the press, so don’t assume that press coverage will automatically provide pressure towards settling.

      Fourth issue (risks if you lose) — I wrote an entire article about this. If you have no money, any award of costs the defendant gets probably won’t be pursued. Most non-government creditors can’t garnish SSDI benefits, and even fewer can garnish SSI benefits. A private judgment creditor wouldn’t be able to garnish either. Still, it’s a potential risk that hangs over your head, in that you could be hassled by collection agents, and if you have any assets that are subject to levy, it’s a very remote possibility that they’d go after them. The short answer is that most indigent litigants (I think the term you forgot is in forma pauperis, by the way) don’t worry about the defendant coming after them for a cost judgment if they lose. It’s usually not worth the money the defendant would have to spend to recover its judgment.

      Fifth issue (unanswered discovery) — It’s always best to confer with opposing counsel about discovery they refused to answer before filing a motion to compel. In fact, many courts now require such a conference because judges are sick of dealing with discovery disputes that the parties could have worked out on their own. Check your local rules of civil procedure to see if such a conference is required (it will usually be right in the rule regarding motions to compel). If you can’t resolve it without judicial intervention, then a motion to compel is required. Even in your local rules don’t require a conference before filing such a motion, it helps to have one and then include the fact that you tried to resolve the matter without judicial intervention in the motion itself.

  2. Far says:

    I have question from you my wife had accident in NH and it was her fault, but the another driver has a great full coverage insurance to cover his bills my question is my liability and his insurance is normally add to each other for solve the case or not it depend only to my liability ?

    • fl_litig8r says:

      It depends on the type of insurance you’re referring to. If you mean the other driver had great health insurance, then your wife would still be liable to pay any amounts covered by that health insurer because that insurer has rights of subrogation and reimbursement. If you are referring to the Medical Payments coverage the other driver had through his auto insurance, your wife would not be liable for those amounts because New Hampshire prohibits subrogation by Med Pay insurers under RSA 246:17.

      Either way, the other driver can still seek pain and suffering and other types of damages like wage loss from your wife’s liability insurance.

  3. Nancy says:

    In New Mexico we have 3 yrs to file a law suit or nothing can be done. In January my attorney did a Demand letter stating only pre exisiting conditions of arthritis and DDD. I have serious injuries and the party at fault said they were 100% responsible. I have 2 weeks left and no corrected Demand letter has gone out. I am feeling the attorney threw the case. The attorney previously stated he did not want to do a law suit and put that much money into my case. A few months ago he stated he would file suit. I am not sure I am being hung out to dry and should pick up my file and file a complaint of invalidating the Contract of not representing me with the judicial review. Can you shed any light as to whether a case can be turned around, and if he made me a a false promise of filing the suit. they wasted 3 years.

    • fl_litig8r says:

      At this point, your lawyer really needs to file suit. He can keep trying to settle after the suit is filed, but there isn’t any time left to take another shot at settling beforehand (at least via letter). You don’t have enough time to find another lawyer, so your lawyer is pretty much stuck filing the lawsuit or risking a malpractice claim and/or a bar complaint. Whether he’s afraid of a malpractice claim depends on the value of your lawsuit, but the bar complaint for not diligently representing you is a real threat. I’m absolutely not saying that you should threaten your lawyer with these things. In fact, I’d advise against it.

      What I recommend is talking to the lawyer and letting him know that because there are only two weeks left on the statute that he has to file suit. If he won’t file suit and/or if he withdraws as your attorney, that’s when you file a bar complaint (don’t threaten it — just do it). Filing suit on your own without another attorney doesn’t give you much of a chance of actually making a recovery, so whether you’d want to do that is up to you. Whether a legal malpractice lawyer would take the case depends a number of factors outside of whether your lawyer was negligent, so that’s something you’d need to find out if the time comes.

      The best case scenario is that your lawyer files suit before the statute runs and then he is able to negotiate a settlement. This is why I recommend not burning that bridge with him just yet.

  4. tad [last name removed by admin] says:

    I was wondering what the standard was for lawyers fees? Is it 1/3 of the gross (medical bills included, or of the net?


    • fl_litig8r says:

      While standard fees differ from state to state, a very common (probably the most common) “pre-lawsuit” attorney’s fee is 1/3 of the gross settlement. In many states, this fee will increase if a lawsuit has to be filed. In Florida, it increases to 40% of the gross settlement after suit is filed and the defendant files an answer denying liability. By gross, I mean that the fees are taken out before any medical bills or liens are paid. In many cases, this also means the fee is deducted before the attorney’s costs as well.

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