A demand letter is a formal written communication sent to the at-fault party's insurance company that outlines the legal basis for your client's claim and specifies the compensation you are demanding. This document typically marks the formal beginning of settlement negotiations and serves multiple strategic purposes.
A well-crafted demand letter includes: a clear statement of facts describing the incident; analysis of liability showing the defendant's fault; summary of injuries and medical treatment; documentation of damages including medical expenses and lost income; evidence establishing causation and defendant's negligence; and a specific demand amount with a reasonable timeframe for response.
The timing and content of your demand letter can significantly impact settlement outcomes. Sending too early, before maximum medical improvement is reached, may result in undervaluing future damages. Sending too late may weaken your negotiating position. Effective demand letters are thorough yet focused, presenting your strongest arguments while leaving room for negotiation. Many PI practitioners recommend sending demands via certified mail with return receipt and following up with a phone call to adjuster to discuss the claim.