How To Write an Insurance Settlement Demand Letter on an Auto

by Contributor

One of the most annoying, time consuming, and sometimes dangerous things that can happen to us when we're busy living our lives, is to be in an automobile accident. You may or may not have been injured, but you certainly have some damage to your vehicle. Then there's the lost time, lost wages, replacing your car when it's in the auto repair shop with a rental car, and maybe medical bills. On top of that, you have to do all this while dealing with the auto insurance company. Assuming this accident was not your fault and you aren't going through your insurance company for your claim, you will have to deal with the insurance company of the owner of the other vehicle. If you don't have an attorney, and one isn't necessary, you may ultimately have to write a settlement demand letter. The demand letter is a document in which you will lay out your expenses and any pain and suffering from physical injuries you may have sustained from the accident. You will then give the auto insurer the bottom line on what dollar amount you want from them. This is the start, not the end; there will usually always be negotiations.


Gather all of the relevant records to your situation. If you still have an unresolved injury, you can still demand a settlement, but it is just a little more complicated when both parties are trying to figure out what the future medical bills, and or pain and suffering, will be. It helps if you have a doctor who can document what the future requirements will be. You will generally have an auto insurance property adjuster for the damage to your vehicle and all related expenses, and also a liability claims representative, or claims examiner, to settle all physical injury issues. Most of the time the Settlement Demand Letter will be for the physical injuries incurred in the auto accident. So, get the name and number of the specific claims representative that is handling your claim. If you don't know it, ask them for the address to send your demand letter.


Make a list of all expenses incurred in treating your injuries from the auto accident. Again, this can include, in most states, lost wages for when you had to leave work for medical appointments, reasonable transportation costs to get to your appointment, the medical bills themselves, and any prescription costs.


Draft a letter like you would any other business letter. It is very important that you stick to the relevant facts when writing an auto insurance settlement demand letter. You don't want your demand to be discounted because of personal or inflammatory remarks. Set out the basic facts of the accident and your source of support that the other driver was at fault. Usually a police accident report, especially if you were injured. Then briefly point out the damage to your vehicle and then the injuries you sustained. You will total your medical bills and expenses on the letter. If the claim's examiner does not already have copies of your photos and bills, then you need to attach them to your demand letter. You will not get any money without documented proof. Include copies of any other expenses related to your injury as well.


Now, the bottom line. This is what the auto insurance settlement demand letter is all about. What do you want from the insurance company? If the insurance company has not been paying your medical bills and related expenses, then you want these reimbursed. If you have health insurance that is covering your expenses, then you can't get that money reimbursed, but any out of pocket expenses are reimbursable. On the other hand, even if you have health insurance, the amount of your medical bills will be used to calculate your pain and suffering. That is the amount over and above your expenses that an auto insurance company will pay you for your nontangible injury. That is the essence of your settlement demand letter. Every auto insurance company uses a method, call it a multiple, to figure out pain and suffering. This is where you will make a stab in the dark. Just as an example, one company may appear to want to settle pain and suffering at 1 1/2 times your medical bills, another 2 times, and yet another at 3 times. This is where the negotiation comes in. Make a settlement demand that you think is reasonable, and go from there. Send the letter certified mail with return receipt, and follow-up in a week or so with the claim's representative.


  • check Don't make threats to sue in your letter unless you are willing to back them up.
  • check Don't expect to get rich unless this an extreme injury case with death or permanent disabilities and, in that case, hire an attorney.
  • check Remember that there are policy limits. Any demand above that is dubious at best.

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