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What's a demand letter? How do you write one?

Most people think that filing a lawsuit is the norm after a motor vehicle accident.

In reality, a lawsuit only happens after negotiations have broken down and it's clear that the two sides are so far apart that there's no way to reconcile them.

Long before you hit that point, you'll need to send a demand letter to the person responsible for the accident -- or, rather, to his or her insurance company.

What is a demand letter?

The demand letter is what tells the other side, in theory, what it would take for you to agree to settle out of court and close out the case.

An effective demand letter should be firm, not threatening. There's no reason, for example, to threaten to file a lawsuit if you aren't happy with their response -- the insurance company is already aware the direction things are headed.

It also needs to be reasonable, fact-based and fairly emotionless. You don't want to seem either entirely unyielding nor desperate to settle.

How do you write one?

Many people hire attorneys to write their demand letters after a motor vehicle accident because attorneys know exactly how to word them, apply the right amount of pressure and figure out how much the insurance company will likely pay.

If you're doing it yourself, you need to follow some basic steps:

  • Organize all of your documentation -- your medical bills, the value of the sick leave or vacation time you took from work, the value of any unpaid leave, the cost to repair your car and copies of the police report for the adjuster to review.
  • Lay everything out in a timeline in your letter. Use subheadings to help break things down. Add totals in where necessary. Your goal is to make this as clear and easy for the adjuster to see as possible -- because he or she has to justify the amount paid to his or her superiors, so clear information from you helps make that happen.
  • Justify your request for pain and suffering compensation. Point out the number of days spent healing, the types of injuries you suffered and any invasive surgeries you had to endure.

Finally, give the adjuster a deadline to respond with either an agreement or a counteroffer.

After that, it's just a matter of negotiating until you hit a figure on which you both agree.

Source: FindLaw, "Ten Tips for Writing an Effective Demand Letter," accessed Dec. 15, 2017

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