Understanding what happens after a demand letter has been sent, including what you might anticipate during each phase, may determine whether you settle your claim for less than you’re entitled to or recover what you’re owed.
At Zoeller Law, we have assisted numerous clients with this throughout hundreds of cases. With this experience comes an understanding of the entire process. This article explains every step, so you know what to expect and can make informed choices about your personal injury claim.
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561-689-8180Why is a Demand Letter Important? What Is It?
A demand letter is a written notification that is delivered to the insurance carrier (or sometimes to the person at fault) that outlines your claim and provides details regarding the amount of monetary compensation that you believe you are due. As such, it represents the initial move in your negotiation, and the one that establishes expectations for all subsequent discussions.
Generally, a well-written demand letter will include information about:
- The facts surrounding your accident: When did the accident occur; where did it occur; who else was involved; etc.
- Evidence of liability: Why is the at-fault party liable for your injuries?
- Description of your injuries: What type of injuries you sustained; how severe your injuries are; what your doctors say is wrong with you?
- Documented examples of your damages: Medical bills; wage loss; out-of-pocket expenses; anticipated future costs
- Non-monetary damage items: Pain and suffering; emotional distress; diminished ability to enjoy life
- Basis for your legal claim: Specifically, which duties were breached by the defendant under Florida law
- Specific dollar amount requested: The total sum you want the carrier to pay; frequently, a deadline for response
A demand letter needs to be well-researched. If the content is unclear or weakly supported, then there exists an opportunity for the carrier to provide a lowball offer or reject the claim altogether.
On the other hand, if you document everything thoroughly, using solid evidence to support your claims, then the carrier understands that you are serious, and if they fail to provide fair compensation, you’re ready to escalate.
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Receiving Responses and Next Steps
When an insurer receives a demand letter, one of three possible responses is made: they accept it, counter it, or deny it. Below is what these actions look like in practical terms.
Acceptance of the Demand Letter and Settlement
The ideal situation occurs when the insurer agrees with your demand. While acceptance without Negotiation is extremely rare on a single demand letter (especially in clearly established liability situations with complete documentation), it does occasionally occur.
After acceptance, you should expect to receive a settlement offer and be asked to execute a release of liability. That release is permanent. By signing the release, you relinquish your entitlement to seek any additional compensation concerning that accident, even if future medical problems develop.
Before executing the settlement agreement, your attorney must review all aspects of the agreement. Following execution of the release and its delivery to the insurer, payment should follow shortly thereafter (typically 1-4 weeks).
Counter Offers and Negotiation
More commonly, the insurer responds with a counteroffer, which is almost always lower than what you demanded. That does not necessarily signal “endgame,” however. Rather, it signifies the start of a negotiation, and it is where having an experienced attorney makes a huge difference in achieving success in your case.
Your attorney reviews your counteroffer compared to the complete picture of your damages, i.e., past & future medical costs; lost income; and intangible effects of your injuries. If your attorney believes the counteroffer does not adequately reflect those losses, he/she will prepare his/her own counteroffer, along with relevant documentation to support that counteroffer.
Negotiations could go on for several weeks or months. Patience is necessary here. Insurance companies understand that individuals who suffer injuries are financially strained much more quickly than those who do not have such concerns, and thus utilize that strain as leverage to get them to agree to quick and inexpensive settlements. A knowledgeable attorney will never urge his client to prematurely accept an inadequate offer.
Denial of Claim
A denial does not signify that there are no alternatives available. Insurance companies deny claims for various reasons; e.g., disputes regarding responsibility/liability for an individual’s injuries; missing medical records/documentation; exclusions contained within their policies; or simply as part of their negotiation strategy. If a claim is denied, you may choose among several options:
- Present additional evidence and/or clarify any outstanding medical documentation.
- Request review by someone above the level of the original decision-maker at the insurance company.
- File a complaint with the Florida Department of Financial Services if you suspect the denial constitutes “bad faith.”
- Initiate litigation if the dispute cannot be resolved via continued negotiation.
For Zoeller Law, a denial usually indicates that it is time to proceed with filing a lawsuit. The firm was created for litigation purposes, and insurance companies know it.
How Long Will It Take to Receive a Responsive Action or Settlement?
There is no standard response time. However, based upon past experiences and applicable Florida laws, you can anticipate the following general timelines. Under Florida statute, insurance companies are obligated to acknowledge receipt of a claim within 7 days and make a determination regarding coverage within a reasonable timeframe. Generally speaking, you can expect to hear back within 30-45 days after submitting your demand letter. However, cases involving more than one party/individuals and/or those cases involving disputed liability take longer.
Once a settlement is reached in writing, Florida law generally requires the insurer to tender payment according to the settlement terms no later than 20 days after the settlement is reached. If payment is delayed after a written settlement agreement, additional legal issues may arise.
| Situation | Approximate Timeline |
| Clear liability, minor injuries, complete documentation | 30–60 days to settlement |
| Disputed liability or multiple parties involved | 3–6 months or more |
| Serious injuries requiring ongoing treatment | Often longer — see note below |
| The case proceeds to litigation | 1–2+ years before resolution |
The length of time will vary depending on:
- Complexity of case: More parties involved and/or greater debate regarding facts = longer duration for negotiations
- Establishment of liability: Cases where liability is evident tend to resolve sooner than those where liability is disputed.
- Type/nature of injuries: Greater severity of injuries = more serious potential damages = careful scrutiny by the carrier
- Your medical status: Ideally, you would send the demand letter once you have reached MMI (see section below)
- Internal processes/carrier workload: Some carriers are simply slower than others
- Dynamics in negotiation: Number of rounds of back-and-forth needed prior to reaching an acceptable number
Evaluating Settlement Offers
Receiving an offer is an important accomplishment; however, the actual dollar amount does not provide the entire picture. While receiving an offer indicates that some level of resolution will occur, prior to making any decisions about acceptance, evaluation of the overall extent of the proposed settlement must include consideration of whether the total of past losses is being adequately represented and whether the total of expected future losses is also being considered.
An acceptable settlement proposal must provide:
- All medical expenditures that have been paid to date: Including each medical bill, co-pay, and out-of-pocket expenditure;
- Projected medical expenditures for the future: All surgeries, physical therapy, specialist visits, and medications that will be required in the future.
- Lost earnings: Earnings that have been lost to date, and the potential for loss of future earning capacity due to continuing disabilities;
- Pain and suffering: Florida law provides for monetary compensation for non-monetary impacts of serious injuries;
- Other non-monetary damages: Emotional trauma, loss of consortium, reduction in quality of life;
While a settlement that seems fair now may eventually prove inadequate to address potential future medical expenditures, once you sign a release document, you will no longer be able to pursue further recovery. Therefore, it is very important to consider whether or not a settlement proposal addresses all anticipated future expenditures.
Prior to accepting a settlement proposal, here are some questions that you might want to pose to your attorney:
- Have I achieved maximum medical improvement? Am I still receiving medical treatment?
- Is the settlement proposal sufficient to address my estimated future medical expenditures?
- What is the approximate value range for a case similar to yours in Palm Beach County?
- What are the risks and/or costs associated with rejecting the current settlement proposal and pursuing litigation?
- Are there other forms of insurance coverage that we have not pursued?
Looking for a Peaceful Legal Resolution? Let Us Help You
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Get your FREE & confidential case review todayWhat if Negotiations Stall?
Although good faith negotiations are often successful, sometimes negotiations stall. There are several options available beyond the initial negotiation phase. Most do not result in immediate resolution of your case; however, knowing your options before you feel that you have run out of choices is important.
Generally, filing a lawsuit is the next course of action when negotiations reach an impasse. Personal injury lawsuits generally have a two-year statute of limitations in Florida (from the date of the occurrence); therefore, time is of the essence. The mere act of filing a lawsuit does not mean that your case will immediately go to trial. Most personal injury cases settle subsequent to the filing of a lawsuit but before a jury is sworn in to hear testimony. The perceived credibility of taking your case to trial is usually what prompts an insurer to enter into a reasonable negotiation.
Mediation is a structured negotiation process where both sides present their arguments to a neutral third-party mediator, who then attempts to facilitate agreement. Mediation is significantly less formal and less costly than trial and is often ordered by Florida courts prior to conducting a jury trial. Mediation is particularly useful in those situations where the parties are close in their assessment of value.
Arbitration is another option, although it is less frequently utilized in personal injury actions unless specifically agreed upon in writing. Arbitration differs from mediation in that arbitration results in a binding award. Arbitration is typically faster and less expensive than trial; however, it affords fewer procedural protections than a trial.
In those instances where neither mediation nor arbitration resolves the issue, litigation becomes the final course of action. Litigation commences at the onset of representation at Zoeller Law. As such, Zoeller Law has obtained numerous verdicts and settlements totaling hundreds of millions of dollars. Insurers are aware that having Zoeller Law represent you creates pressure through the litigation process to negotiate fairly.
Your Role in the Process
You have an active role in assisting your attorney with your case. Your involvement will impact your case in ways you may not anticipate.
Examples of active participation include:
- Maintaining detailed records of every doctor’s visit, hospitalization, out-of-pocket expenses, work days missed, etc. Keep every single bill/receipt/explanation of benefits related to your care/treatment/losses.
- Prompt communication. Respond promptly when your attorney requires information/signatures/decisions regarding your case. Delay on your part may hinder progress.
- Attend ALL scheduled medical appointments. Failure to attend may create an opportunity for defense counsel to argue either that your injuries were not as severe as initially alleged or that you did not take steps to minimize your damages.
- Be cautious when posting on social media. Defense counsel routinely review claimants’ social media activity for any evidence that may refute their allegations of injury. Exercise caution before posting anything!
- Do not provide recorded statements without your attorney. Should an insurance company representative call you directly requesting a recorded statement, advise them that you will allow your attorney to obtain any necessary statements.
- Tell your attorney everything. Any prior injuries/pre-existing conditions/financial pressures that may impact your ability to maximize recovery must be shared with your attorney. He/she cannot advocate for you as effectively without a thorough understanding of the full circumstances surrounding your injuries/losses.
Those clients who remain actively involved with their lawyers and maintain excellent organization throughout their case ultimately receive better results.
How to Improve Your Demand Letter
Timing is just as important as content when preparing a strong demand letter.
Do not send a demand letter until you have reached maximum medical improvement (MMI). Maximum medical improvement is the point in time when your treating physicians believe your condition has stabilized; i.e., you have achieved as great a degree of recovery as possible or your future treatment needs have become identifiable. Sending a demand letter before reaching MMI could potentially result in under-valuing your claim. If future surgery(s), continued therapy, or chronic limitations resulting from your injuries have not been identified, they will not be included.
Create a comprehensive file containing evidence. The completeness and organization of your evidence file make it difficult for an insurer to dispute your damages. Include:
- Medical records & bills from each treating provider
- Diagnostic imaging & physician notes
- Clear description of the accident with photos
- Witness statement/contact information
- Police incident report
- Employment documents & documentation of time missed due to injury
- Personal journal documenting symptoms & how your daily life has been affected by your injuries
Understanding Florida-specific rules. Florida uses a modified comparative negligence system; if you are determined to be over 50% responsible for causing your own injuries, you cannot collect damages. Therefore, establishing liability facts accurately and completely in your demand letter is essential. Florida statutes limit most personal injury claims to two years from the date of injury. Missing this deadline eliminates your rights to recover. Working with attorneys familiar with Florida laws and courts in Palm Beach County provides you with advantages unavailable to attorneys practicing outside Florida or those who practice general law.
Zoeller Law prepares demand letters as legal documents, as they are not generic form letters. Each component is prepared with the objective of creating the most advantageous negotiating position possible for you. If negotiations fail, each component contained within the file created by Zoeller Law attorneys is prepared for presentation in court.
