What Is a Demand Letter in a Personal Injury Case?
A demand letter is a formal written communication from your attorney (or from you, if unrepresented) to the at-fault party’s insurance company, setting out the facts of the accident, the injuries sustained, the damages incurred, and the amount you are demanding to settle the claim without litigation.
What a Strong Demand Letter Includes
A well-drafted demand letter in an Arizona PI case covers:
- Liability statement: Facts establishing that the defendant was at fault, including police report references, witness statements, and physical evidence.
- Injury description: Diagnosis, treatment received, treating providers, prognosis, and any permanent injury or disability.
- Medical specials: Itemized list of all medical bills, with documentation attached.
- Lost wages: Documentation of time missed from work and income lost.
- Pain and suffering: A narrative of how the injury has affected daily life, relationships, and activities.
- Settlement demand: A specific dollar figure, usually above what you expect to settle for, to leave room for negotiation.
- Response deadline: Typically 30 days.
How It Affects Your Personal Injury Case
The demand letter is the opening shot in settlement negotiations. Sending it too early—before treatment is complete and damages are fully understood—leaves money on the table. Sending it too late risks the statute of limitations. A well-prepared demand letter with complete documentation dramatically increases the likelihood of a fair pre-suit settlement and avoids the cost and time of litigation.
Example Scenario
Eight months after a Chandler rear-end collision, Kevin has completed physical therapy, has a final prognosis from his orthopedist, and has all medical bills in hand. His attorney sends a demand letter to the at-fault driver’s insurer: $67,000 in medicals, $12,000 in lost wages, $120,000 pain and suffering, for a total demand of $199,000. The insurer responds at $95,000. Negotiations begin.
Frequently Asked Questions
When should I send a demand letter in Arizona?
The best time to send a demand letter is after you have reached maximum medical improvement (MMI)—the point at which your condition has stabilized and your total damages can be calculated. Sending before MMI risks underselling future medical costs. The exception: if you are approaching the two-year statute of limitations, send the letter and be prepared to file suit regardless.
Does the insurance company have to respond to a demand letter?
They are not legally required to respond, but most insurers respond because failing to engage exposes them to bad faith liability under Arizona law (ARS § 20-461). Arizona requires insurers to act in good faith and make reasonable settlement efforts when liability is reasonably clear.
Have questions about demand letters or settlement strategy? Call Wood Injury Law at (623) 207-0000 for a free case review.