What is a settlement demand in a California personal injury claim and how does it work ?
March 28, 2014
Lake County CA Injury Lawyer
Personal injury settlement demands come after a person injured in a car accident or other mishap caused by negligence reached a level of recovery sufficient to fully determine the value of the claim. In some ways this is the culmination of the pre-litigation phase of a claim but, in many other ways, it is just a “jumping off point.”
When I talk to a potential client for the first time, I like to discuss the process of how cases can typically progress. Usually the first real question that is asked is “what is a demand letter” followed by “how much are you going to demand”.
These are always tricky questions. Typically, from the initial intake it is almost impossible to determine how much to ask for, if it is reasonable to give an adjuster a number, or finally any value at all to a case.
As stated in an earlier post, the value of a case is dependent upon the injuries suffered, and resulting recovery (if any) from those injuries plus any permanent long term medical issues the injured party may have. Once through the Dr.’s reports, physical therapy reports and the client’s own discussions with me, I will usually have a clear idea of what harm has been done. I will know what it took for you to recover and get better, or what it will continue to take until you are as physically back, to where you were before the accident as you will ever get.
At this time, I will then right a “demand letter”. The demand letter is quite simply my request to the insurance adjuster to settle the claim. I will explain a number of things that will show my point of view of the case. This will include a description of what happened, why the third party is at fault, the damage done to my client, future care that is expected, and finally my initial offer to settle.
This offer to settle is usually the most important part of the “demand” in my client’s perspective. You first have to understand, that before the demand can be made my client has been suffering from agonizing injuries and has been through at the very least several or more months of physical therapy. These appointments have usually completely turned my client’s lives upside down. They have missed work, missed vacations, and missed time with their children and families. By the time the demand is ready to be made, my clients only want their lives back. The demand to them, is a symbol that their life should be returning to normal.
So, they ask, “what are you going to ask for to make up for everything this person put my family and myself through?”
Different Methods of Communicating a Personal Injury Settlement Demand
Three different amounts can be asked for when doing a demand.
The first is a number that is based upon the full medical bills that were accrued during the client’s recovery. The medical bills are considered “special damages” and are part of a formula that is then blended with general damages (typically the “pain and suffering” aspect) and a number of other factors and value range is produced. Typically, when this formula is used, the high end of the value is given in the demand. This projects to the adjuster that you have done your homework, you know the amount the case is worth and you want the full value of what you determined.
The second method is to write a demand that is “open”. This means that you still provide all the information from the first type of demand, but instead of giving a hard settlement number, you provide no number at all and you ask the insurance claims adjuster to put forth the “first” offer of settlement. There are many reasons that attorneys will use this method. Some may be that you do not want to project where you value the case, to that you want the adjuster to “show you his cards first”. This method is typically used when you want to convey to the adjuster that you want them to show the attorney what value they put on the case without projecting the attorney’s value.
The third method is to ask for the full policy of the insured. To understand this, you must first understand that each auto insurance policy written in California has a maximum amount that is payable in a third party liability claim. California law puts the minimum amount at $15,000.00 per party per claim. This means that even if your injury is catastrophic, if the policy has a limit of $15,000.00 you will only recover $15,000.00. A number of injuries that can occur in a motor vehicle accident will never exceed the policy limits of the third party driver but, unfortunately, there are times that the accident will be bad enough that the person injured will have been hurt above and beyond what the policy of the third party carries. At this time, a request for the full policy will be asked for with certain conditions attached.
A note on policy limit request though. Sometimes the injuries are worth around what the policy is. Meaning on a $15,000.00 policy, the person insured’s case has a value of $12,000.00 to $16,000.00. At this time, a policy limit request will also be made.
The demand though is only the opening round in the negotiation process. Simply put, the demand is the first volley to settling the claim. Whatever type of demand is given, the response will typically be a counter offer and then the negotiation will begin. Having an experienced Personal Injury Attorney during this process is what will make sure that the injured receives full value for his claim.