How to Write a Convincing Demand Letter to Settle Your Insurance Claim

An insurance demand letter is a factual summary of your claim, which includes all injuries and emotional trauma, any loss of wages, and property damage. Read our guide to write a convincing demand letter to settle any insurance claims you may be waiting on.

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Chris Tepedino is a feature writer that has written extensively about home, life, and car insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and C...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent Laura Walker

UPDATED: Apr 28, 2022

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Even though you do your best to stay safe, the time may eventually come when you’re involved in an accident where the other party is at fault. When this occurs, you could be stuck with loss of wages, damaged property, and medical bill expenses that your health insurance did not cover. Whether it’s just property damage or personal injury, you need to know that the at-fault party’s insurance is willing to indemnify you in the case of a claim. Writing a demand letter is the best way to make sure that all your expenses and losses are taken care of. This article will be a step-by-step guide on how to write convincing demand letters to insurance companies to settle your insurance claim.

What is a demand letter to an insurance company?

Before going into detail about writing insurance demand letters, you may be wondering what they are and the purpose behind them. Contrary to the title, it isn’t just an ultimatum letter with a list of commands that you expect the insurance company to fulfill. An insurance letter of demand is a factual summary of your claim, which includes all injuries (major or minor), loss of wages, emotional trauma (if applicable), and property damage. If you are chasing compensation for either of these factors, then demand letters are a dependable way to ensure a fair settlement. Consider it to be the focal point of your negotiations with the insurance claim process.

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Is a demand letter required to settle your claim?

Truthfully, a demand letter is not required to settle your claim. However, it is strongly recommended that you write one and send it to the insurance company. Why go through the trouble of writing an important letter, when you don’t have to? Good question. Imagine these two scenarios:

  • You’re sitting at a red light, patiently waiting for it to turn green. After the light turns green, you follow the safe procedure and wait two to three seconds. With the coast clear from all angles, you start driving. Out of nowhere a car runs the red light and fish tails you. You don’t seem to be injured. However, there is major damage done to your vehicle. You wake up the next morning with a light pain in your neck, but don’t think anything of it. Two weeks later, the pain is unbearable. The doctor informed you that you have a slipped disk in your neck. What started out as a light pain turned into multiple neck surgeries and months of rehabilitation. No doubt in this scenario, composing a demand letter would be suggested. While the property damage was specified, the initial police report didn’t list any personal injuries.
  • You’re working at the grocery store. Due to a customer spill, your fellow coworker mopped aisle 7 and forgot to put down a caution sign. Unaware that the floor is wet, you accidentally slip and fall; which results in medical bills and loss of income. Your employer’s insurance company is willing to pay you for the medical expenses, but not for loss of income. In this case, a demand letter would be the best move towards a fair resolution.

What should you consider before drafting your demand letter?

Remember, this letter should only provide clean and factual information that can be supported by documents. Before drafting the demand letter, there are certain questions you must be able to answer; as they will help you compel a strong argument.

  • How is the alleged at-fault party responsible for your damages?
  • What property was damaged? And, how much does it cost to repair/replace?
  • How bad are your injuries? Or they severe or minor? And is there any long-term consequence involved?
  • What were your expenses and medical treatment?
  • Did the injuries affect your everyday lifestyle? If so, how?
  • Did your injuries cause you to lose any income or wages?

Make sure to refer to your medical bills/examinations, property damage assessments, police reports, and any notes that help to support your claim.

What is the proper structure of a demand letter?

A demand letter should be broken down into three separate parts. In this section, the elements that should be included in the heading, the body, and the conclusion of the letter will be explained.

The Heading

This may seem like a minuscule topic to go over. Nevertheless, the heading is just as important as the other two sections of the letter. Thankfully, this is the simplest part of the constructing process.

  • Your Information. The first four lines of the letter should include: your name, address, and phone number.
  • Insurance Company’s Information. Make sure to include the name of the insurance company, name of the adjuster/or medical examiner, their title, and the company’s address.
  • Date. Here is where you list the date that you plan on mailing or faxing the letter over to the insurance company
  • Intent. You must include, “FOR SETTLEMENT PURPOSES ONLY” before the body of the letter to label the intent. Why? As stated previously, you don’t want to come across as an upset customer making a list of ultimatums. It is always best to let the intent of the formal document to be known in the beginning.
  • Claim Information. Before you address the letter to a, “Mr., Ms., or Mrs.”, always include the claim information. The info will consist of four lines: your claim number, the insured name plus date of birth, your name plus date of birth, and finally the date of the accident. All details need to be correct.

Any incorrect information could lead to the wrong claim, insured, and could ultimately result in the delay of your settlement process.

The Body

The body of the letter is the most instrumental part to determine the overall effectiveness of your demands. The details provided should be able to be a logical and powerful roadmap to the success of your settlement. The body of a proper demand letter should contain five different parts.

  • Introduction. The introduction letter explains to the claims adjuster that you’re interested in settlement negotiations. The section should consist of about two paragraphs. The first paragraph should include a list that states: the date of the incident, the alleged insured at fault, a brief description of what happened. The second paragraph will inform the adjuster of your current medical condition and your intentions to bring the settlement to a close. It should read something like this:

“On June 14, 2017, I was obtained bad injuries when your insured failed to put down a caution sign, to indicate that the floor was wet.

Through the expertise of my physician, my medical condition is now stable. Although, I am still experiencing pain and suffering. I am ready to bring this claim to a settlement. In order to do so, I have detailed information for your review. I also have supporting documentation attached.”

  • Background. The background is only a more descriptive summary of the incident that occurred. Describe where you were and what you were doing immediately before the accident, then how the accident occurred. Keep in mind, that your information must stay factual! If it didn’t happen, is irrelevant to the incident, or there is no proof to verify, then leave it out of the background. Your summary is the meat and potatoes of settlement. Anything you ask the insurance company is based on the description of the events that is listed in the demand letter. Any contradictory or wrong information could hurt your settlement.
  • Liability. The sole purpose of the liability section is to show how the insured was at fault for the incident. Give an extensive statement why it is the insured’s fault and how your injuries or property damages resulted from the accident. At this point, you can include any evidence that you have to support your argument. Sufficient evidence would be police reports, accident photos, witness statements, or any other supporting documentation.
  • Injuries. When writing this section, it is best to have a record of all medical treatment received as a consequence of the accident, because you will need to list them. Don’t hold back when writing this section. Make sure to go into great detail explaining the physical pain and emotional anguish from the time of the accident through the course of your medical treatment. Scars, disfiguration, stiffness, soreness, and disabling are things that can and should be mentioned. Also make sure to include whether or not the physical pain is a long-term consequence. Don’t be dramatic, but be sure to write in as much medical terminology as possible, when describing medical treatment and issues.
  • Damages. The same as the other sections of the demand letter, you want to get specific. This is highly important, because damages is a section where you calculate the total amount of damages and demand the full amount you’re expecting the company to indemnify you for. There are two types of damages that should be listed: special damages and general damages. Special damages are items such as; ambulance rides, emergency room treatment, non-emergency medical treatment, future medical treatment, any specialized doctor visits (chiropractor, knee and hip specialist, etc.), prescription costs, and loss of wages. Note that with loss of wages, you may have to get verification from your employer the cumulative time you’ve been absent from work and the wages lost at your pay rate. General damages include any emotional distress and pain and suffering. Make sure to list a separate total for each type of damage.

The Conclusion

  • The closing. The best is always saved for last! In this section, you boldly list the: total personal injury demand. The amount that you demand should always be higher than the total amount from both the special and general damages. For example, if your both amounts equal a total of $120,000, then it would be wise to demand over this amount; as it allows room to negotiate. After, the amount is demanded. Politely, thank the claims adjuster for their assistance and tell them your expected time frame for their response. After your closing, make sure to list your supporting documents starting from letter A at the bottom of the letter.

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Is there anything that should not be included in the letter?

Yes. There are certain things that a demand letter should not contain. Earlier in the article, a few things we discussed such as poor grammar, typos, and dramatics. Here are two other things that you should never write in a demand letter.

  • Profanity. While you want the insurance company to feel your pain, you don’t want to be unprofessional or seem aggressive. It may lessen your chances of a settlement.
  • Contradictory Statements. The whole point of the demand letter is to prove the other party is at fault by your explanation of the events and damages. You should never write a statement indicating that you could be at fault, even if you may be slightly responsible. Don’t give the insurance company any information to use comparative negligence against you.

If you’re not feeling completely confident about your demand letter, google “property damage claim letter sample” or something similar and look through a few examples.

When should you send your demand letter?

You may want to know when is the best time to send a demand letter. A lot of people send their demands right after the accident/incident occurs, which usually results badly. Here is the reason why. If a demand letter is sent too prematurely, then you won’t be able to list all your damages and expenses. Always wait to give your letter to the insurance company after your medical condition is stable and your doctor has given you a long-term outlook on what your health will look like in the future. After doing this, you will have exact estimations of your present damages and future ones.

What should you expect after you send the letter?

The waiting game is always the worst! You never know how the insurance company is going to respond or how long it will take to get a letter from the insurance company. Here are three practical realities to look forward to after your demand letter has been sent.

One, the insurance company accepts your offer and decided to go ahead and settle the claim. Truthfully, most insurance companies want to get done with your settlement as soon as possible. The longer the claim drags out, the more resources are extended to it; while they also have other claims to tend to.

Two, they may decide to refuse your demand and counter offer another settlement. It may sound daunting, but all hope is not lost in this scenario. That is the importance of setting your total demand higher than the exact amount to prepare for counteroffers.

Three, the insurance company may not respond at all to your letter. Yes, even though you clearly listed your expected response time they may just ignore your letter. Why? Because legally there are no laws to enforce them to respond to it. In this case, don’t worry! Consider you can at this point file a lawsuit. The demand letter will still help to speed up the lawsuit, because everything has been clearly listed and documented with supporting evidence.

You work hard for your property and your health is important to you! If someone incurs any damages to you, then you have a right to be repaid for any losses. If you’re concerned about writing the letter or the consequences afterwards, then find an attorney for counsel. Having an attorney isn’t a requirement, but it can still help. Ultimately, demand letters are a sure and overall effective way to get yourself a fair settlement.

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