Every personal injury lawyer knows that a well-written demand letter is more than just a step in a case. It’s literally the first presentation of a client’s claims and the launching pad for the client’s case. For seasoned litigators, a proper demand letter sets up an opportunity to hold an insurance company accountable for its poor claims handling and creates an opportunity to potentially recover the full value of a client’s claim, and not simply the limits of a defendant’s coverage. In other words, a compelling personal injury demand letter is a critical tool to help maximize a client’s recovery.
Insurance companies have a legal duty to consider their insureds’ interests at least equal to their own. Essentially, what this means is that if an insurance company is presented with a claim that is potentially valued greater than their insured’s policy limits, then the insurance company may be acting in bad faith by not settling the claim within their insured’s policy limits. And if an insurance company has, in fact, acted in bad faith, then there are very serious consequences for those bad faith actions.
A savvy litigator can use an insurance company’s bad faith decisions against them, but to their client’s benefit. However, none of this is possible without a proper demand letter. Georgia law is clear on what a proper demand letter must contain. Despite this, we consistently see attorneys, even experienced ones, fail to comply with the statute. As a result, they are potentially missing the opportunity to recover more for their client than the available policy limits. Do not become one of these failed statistics.
“The purpose of writing a good demand that complies with the law is to set up a possible bad-faith case. By doing that, you have created heavy leverage to use against the insurance company, and you can potentially collect in excess of the policy limit from the insurance company. That’s what writing a good demand is about – it’s about ethical lawyering and protecting your clients’ best interests, which is, after all, your job as a lawyer,” said Jason Schneider, Co-Founder & Partner at Schneider Williamson.
5 Steps to Use a Personal Injury Demand Letter to Exceed Policy Limits & Maximize Settlements for Your Clients
When it comes to maximizing a settlement for your client, it all comes back around to a document that is, on the surface, relatively simple and straightforward. But without a well-executed personal injury demand letter, a defendant’s policy limits will be the ceiling on your client’s settlement.
Here are 5 ways to use a personal injury demand letter to potentially recover more than their policy limits and maximize settlements for your clients, informed by decades of experience and case insights:
- Know the Law: The Foundation of a Strategic Demand
- Ditch the Assembly Line: Craft a Compelling Narrative
- Partner with the Adjuster: Help Them Help You
- Build a Professional Reputation
- Be Prepared to Litigate
Related Article: 10 Ways to Increase the Value of a Personal Injury Case
1. Know the Law: The Foundation of a Strategic Demand
Georgia statute O.C.G.A. § 9-11-67.1 outlines the specific requirements a demand letter must meet to provide an insurance company a fair opportunity to protect their own insured and resolve a motor vehicle collision case within the applicable insurance policy limits.
“The reality is, in order to possibly get more from the insurance company than the minimum policy limit, you have to present a demand that complies with this Georgia statute. If there’s inadequate insurance and the insurance company doesn’t pay it, you can try to recover more. The demand letter is incredibly important,” said Schneider.
This is a crucial first step that many lawyers get wrong. The law is very specific about the required content. It’s imperative to make sure you are following the instructions to the letter. Remember – even minor deviations from the statute can be fatal to a potential bad-faith scenario.
“The Georgia law, O.C.G.A. § 9-11-67.1, specifically tells you what should be in the demand and what must be included. It is still shocking when we see demands that just fail to simply follow the instructions that are in that law. The law literally tells you what to include, and job number one is to do that,” said Campbell Williamson, Co-Founder & Partner at Schneider Williamson.
Many potential bad-faith scenarios are lost because the plaintiff’s attorney failed to comply with the letter of the law in their demand. A demand letter that simply looks right but fails to meet the requirements closes the door on a potential excess recovery.
“Some cases are objectively worth way more than the available insurance limits, and in that situation, it’s likely going to settle for the insurance limits as soon as you send the demand. But sometimes, insurance companies make very stupid decisions and mistakes, and if an attorney has failed to send a proper demand letter that complies with the statute, they have destroyed their own ability to hold the insurance company’s feet to the fire and leverage a better settlement for the client,” said Williamson.
Related Article: 10 More Ways to Increase the Value of a Personal Injury Settlement
2. Ditch the Assembly Line: Craft a Compelling Narrative
Beyond simply checking the boxes required by the statute, a truly effective demand letter must be a compelling piece of advocacy. The days of using a canned, one-size-fits-all template are over.
“Don’t treat your practice like an assembly line. All attorneys will take an old demand letter they’ve drafted for a different case and use it as a template for drafting the demand letter for a new case, and that’s fine for saving time, but it’s important to go the extra mile and include all the pertinent arguments and facts that support the current case you’re working on – that’s what makes it compelling. You have to make that case in the demand,” said Williamson.
An insurance company is not going to be moved by a boilerplate letter that simply lists injuries and medical bills. The demand letter is your first opportunity to tell your client’s story and make a case that resonates beyond the numbers.
This means doing the extra work to include all the pertinent arguments and facts that support them.
Why is your client’s case compelling? What are the key details of the accident that demonstrate the at-fault party’s negligence? How have the injuries changed your client’s life in a way that goes beyond a simple list of medical expenses?
It’s also important to ensure you are learning and not making mistakes you have made before.
“Make sure you’re not repeating mistakes that you’ve made in the past – this is the risk when you’re recycling demand letters. In fact, we see this happen all the time, where somebody sends us a case, and we’re like, ‘This demand’s no good. We’re going to have to re-demand the limits, and we realize it’s the same demand that the attorney has used countless times,’’ said Williamson.
We’ve seen firsthand how a well-crafted narrative can push a case that might be on the fence over the edge, compelling the insurance company to pay the policy limits rather than risk a jury verdict.
Related Article: Why Use a Legal Focus Group in Personal Injury Law | We Can Help!
3. Partner with the Adjuster: Help Them Help You
While some insurance adjusters may be adversaries, many are just trying to get files off their desks. They are a crucial piece of the puzzle, and a good demand letter helps them do their job.
“Insurance adjusters are not always your adversaries; some are that way, and you can’t help it, and that’s when it goes to litigation. But a lot of them want to settle their cases. Communicate with them, see what they need, find out what they need, and get them the information they need. A lot of times, they want to work towards a resolution, and what they’ll tell us off the record is, ‘Help me help you – give me information and evidence I can use to get you the proper amount. I’d love to pay you the limits on this, but your demand sucks,’” said Schneider.
Adjusters often need specific, verifiable information to justify a settlement check, especially when the policy limits are low and the damages are high. Don’t assume they have everything they need. It’s your job to document all damages meticulously and provide it to them.
A demand letter that includes all the bills, records, lost income documentation, and other verifiable expenses gives the adjuster everything they need to input the data and generate a policy-limit check.
“I guess the overall thing to keep in mind as lawyers is if the adjusters are calling, don’t just blow them off. Hear what they have to say. It’s easy to be overly aggressive and immediately on the defensive because it’s in our nature. But take that call and be a professional,” said Schneider.
Related Article: 5 Tips for Dealing with Insurance Adjusters | The Lawyers Toolbox
4. Build a Professional Reputation
On that note, the relationship you have with insurance adjusters and defense attorneys matters. A plaintiff’s attorney who automatically makes enemies of the insurance adjusters and defense attorneys is not doing their own client any favors.
Don’t perceive every attorney as an adversary, either. A hostile and confrontational approach may feel satisfying, but it often leads to unnecessary litigation and delay. Fostering good relationships built on professionalism and mutual respect can go a long way in advancing your client’s interests.
“At our firm, we pride ourselves on having good relationships with defense attorneys and adjusters. It really all plays a vital role in advancing our clients’ interests,” said Williamson.
This reputation often precedes us and can make it easier to get a fair offer from the outset. We find that when an adjuster calls, it’s in our client’s best interest to hear them out and see if there’s a path to a quicker resolution. We’ve seen time and again how this helps us advance our clients’ cases.
5. Be Prepared to Litigate
The final strategy is the willingness and ability to take the case to trial and fight for your clients.
If you send a proper demand letter for a case whose value exceeds the available policy limits and the insurance company doesn’t pay it, they have “blown” the demand. This creates the possibility for a bad-faith claim, allowing you to seek a recovery for your client that is in excess of the policy limits.
“If you issue a good demand for a client, and the insurance company sees things differently, and you’re sure that they’re wrong, then you have to hold their feet to the fire. When they try to pay you the limits three months later, once you’re in litigation, don’t be afraid to say, ‘No, you had an opportunity to pay these limits already, and you forwent that opportunity,’” said Williamson.
Many firms, especially those that primarily handle pre-litigation cases, may not have the resources or experience to follow through. Insurance companies know this and factor it into their settlement offers. They may try to offer the policy limits later in the case, hoping you’ll just take the money.
This is where you must be prepared to say “no” and go to battle for your client.
It is a delicate decision. Our firm’s track record of six, seven, and eight-figure verdicts demonstrates our commitment to this principle. While the vast majority of these cases settle for more than the policy limits before trial, be prepared to go the distance to get the best outcome for your client.
Related Article: How Atlanta Personal Injury Attorneys Benefit from Referral Partners
Better Lawyering from Demand Letters to Trial Litigation
Crafting a compelling demand letter is essential due diligence now, so you have the opportunity to maximize the settlement later. When we talk about a personal injury demand letter and policy limits, this is why it is so essential to take it seriously and execute it correctly. The difference between a solid demand and a failed one can be the difference between a minimum recovery and a seven-figure settlement. If you have a demand that was not met and are unsure how to proceed, we can assist.
Schneider Williamson is a trusted referral partner for law firms across Georgia, providing the litigation expertise necessary to turn a blown demand into a full recovery for your client. Contact us to learn how we can help each other by creating a strategic referral partnership.
