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Insurance Demand Letter Response Time

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July 24, 2023 Personal Injury

If you or somebody you love has been injured due to the careless or negligent actions of another individual in Colorado, it is understandable that you want compensation for your injuries and other expenses as quickly as possible. Unfortunately, insurance demand letter response time operates on a much slower clock..

In fact, insurance carriers do not want to pay out a settlement at all, and they will do everything they can to avoid having to do so. And when they do, their offer is usually well below the value of the damages you did suffer. Here, we will discuss one of the most common questions that we receive from clients – “How long does an insurance company have to respond to a demand letter?”

What is a Demand Letter?

A Demand letter is a document sent by one party to resolve a dispute with another party to avoid going to court. In regard to personal injury cases, demand letters are generally sent by the injured accident victim, usually by their personal injury attorney if they have retained legal counsel, to the insurance carrier of the person who caused their injury.

Demand letters are often sent on behalf of people injured in:

What is Included in a Demand Letter?

The demand letter will usually include:

  • A brief synopsis of what happened
  • A list of all injuries and expenses (with proof shown through medical records, bills, receipts, documentation of lost wages or income earnings, etc.)
  • Actual demand for a certain amount of compensation
  • A statement conveying that the injury victim is ready to proceed forward with a trial if their demand for compensation is not met

In many cases, a demand letter follows an initial offer by the insurance company.  This may be the case if the injured person has not had the opportunity to hire a personal injury attorney. Insurance companies are notorious for making low settlement offers that don’t reflect the full value of the damages you suffer. That’s why you should never accept an offer from an insurance company without consulting with a lawyer. If you accept that offer, you cannot ask for more if your injuries require more medical treatment or if your injuries keep you from working longer than planned.

Your lawyer will usually respond to the insurance company’s initial offer with a demand letter asking for fair compensation to cover your full damages.

When is a Demand Letter Sent?

There is a difference between when a demand letter is sent and when the injury has to be reported to the insurance carrier. In general, injuries need to be reported to an insurance carrier very soon after the incident occurs.

However, a demand letter should not be sent until after the injury victim and their attorney have a full understanding of the severity of the injuries and the total compensation that is required to make the victim “whole.” This can take some time after the injury occurs.

After a demand letter is sent, there is no actual law that states how quickly the insurance company has to respond. There are various factors that can affect insurance demand letter response time. This includes:

  • The size of the claim. In general, we will find that the more compensation that is being requested by the injury victim, the longer the longer it takes for the insurance company to response to the demand letter. Larger claims will trigger more intense scrutiny from the insurance carrier.
  • The size of the insurance carrier. Smaller insurance carriers will not have the same resources as larger insurance carriers, and it could take them more time to respond to a demand letter.
  • Previous communication with the insurance carrier. If an injury victim or their attorney has already had communication with the insurance carrier, this could help expedite the demand letter response time.
  • The size of the policy. Claims made against larger insurance policies will usually carry more financial liability for the insurance carrier, thus increasing the demand letter response time.

What Will the Insurance Carrier Say in Response?

There are various ways that insurance carriers could respond to demand letters. The ideal scenario would be for the insurance carrier to accept the full demand made in the letter and pay the full personal injury settlement agreement. However, what is much more likely to happen is that the demand letter response will include a counteroffer for a much lower amount.

This will be where the negotiations between the two parties start. Finally, the insurance carrier could deny a claim altogether in their response to a demand letter or refuse to pay a fair amount. If this occurs, it may be necessary to automatically proceed forward with a personal injury lawsuit against the at-fault party and the insurance carrier.

Keep in mind that while there is no time limit for a demand letter in Colorado, there is a deadline for filing personal injury lawsuits in civil court. Colorado’s statute of limitations is two years from the date the injury occurred. So, it is imperative that you retain legal representation throughout the claims process to ensure you meet all necessary deadlines in your case.

How Can a Personal Injury Lawyer Help Me?

If you or a loved one has been injured in an accident due to the fault of another person or party, a personal injury lawyer can help by gathering all evidence in your case and crafting a strong demand letter. And if the insurance company fails to offer fair compensation for your injuries and other losses, they will file your case in civil court and represent you in court.

The Colorado personal injury lawyers at Fuicelli & Lee have dedicated their practice to pursuing full, fair, and complete compensation for every client. Contact us today for a free consultation and case evaluation.