Auto Liability Demand: What are the Components of an Auto Liability Demand Letter?

When you are injured in an auto accident or “crash” your first concern should be recovering from your injuries.  If they are severe, you may wish to retain an attorney to take care of the mechanics of negotiating a settlement with the responsible party’s insurance carrier.  However, by law you have every right to handle a “bodily injury settlement” directly.  If you are placed in this situation the information that follows will be instrumental in effecting a settlement agreement that compensates you fully for the expenses and inconveniences you have incurred.  You will need to write an auto liability or “bodily injury” demand letter.

Even if you decide to retain an attorney it is helpful to know the components of an “auto liability demand letter”.  It will help you do the right things to allow a good settlement.

The first components of a bodily injury settlement and of your demand are known as “specials”.  These are all of the expenses you have incurred which can be documented via receipts, bills and verifying payment sources. The largest of these will probably be your medical bills.  Do not ever accept a settlement until you have all of the bills in hand.

Medical bills consist of bills for doctor’s visits, emergency room charges, x-rays, laboratory tests, surgical procedures, hospitalizations, physical therapy, chiropractic adjustments, and a host of other medical charges.

The next type of “special” is the bill or replacement receipt for any property damaged in the accident.  An example of this is the eyeglasses that fell off your face and hit the windshield, or the pair of pants that was sliced open by the paramedics to gain access to your wounded leg.  The type of property damaged in an accident can vary widely and consists of inexpensive items and very high value items. Each accident is different in the items involved, but remember that if its value can be documented, it can be claimed.

A third and sometimes overlooked “special” is the loss of wages incurred, due to the disruption of employment, in the aftermath of a “crash”".  Documenting this special involves obtaining a statement from your employer that you missed work as a result of the event.  This statement needs to show the number of hours or days missed and the dates.  The second part of documenting wage loss involves showing the rate of pay. This aspect can be verified by a copy of your paycheck immediately before the date of the accident.  It is important to tie these two aspects of wage loss together with a mathematical statement and delineate the total amount of wages lost in the “demand letter”.

You should begin assembling bills, receipts and verifications from the day of your accident until you are completely recovered.  Always ask each medical provider if their bill includes all of the charges and is final, before you present these bills with a “demand letter”.

The second component of a bodily injury demand is the pain and suffering you have endured.  Pain and suffering is documented by submitting the medical aspects of an injury in writing.  An example of this is:  As a result of the careless action of your insured I suffered a severe blow to the head which caused a concussion.  For 3 months I had excruciating headaches, which prevented me from working a normal schedule, and carrying out all aspects of my normal day-to-day activities.  My neck was thrust forward and backward in the impact, causing painful whiplash symptoms, resulting in the need for 6 months of twice weekly chiropractic adjustments, and 4 months of monthly chiropractic follow-up.  Although I have been told that everything medically possible has been done to restore my good health, I now suffer from intermittent headaches, which are much more severe, than any I ever experienced before the “crash”.

The second aspect of pain and suffering is placing a value on this settlement component. Although there are many different formulas for arriving at the appropriate dollar amount, “demand letters” generally ask for 5 times the amount of specials and settlement is between this figure and 3 times the amount of specials. Since the pain and suffering amount is based on the amount of “specials” it is very important to pay close attention to documentation of all “specials”.

Once you have concluded your medical treatment and assembled all of your “specials” you must write and send a “”demand letter”.  The written demand starts the clock on entering into verbal negotiations. Only very small settlements can be concluded without a “demand letter”.

Your “auto liability demand letter” should include an opening paragraph summarizing the facts of the accident and responsibility. The second paragraph outlines the medical aspects of the claim. If you have residuals (continuing injuries or medical encumbrances), be sure to explain them in this paragraph.  In the third paragraph you list your “specials” and refer to related attachments. Be sure to include copies of all the bills, receipts, etc. for the “specials” involved in your claim as attachments. The fourth paragraph makes a monetary demand and requests a response. In the final paragraph you thank the claims representative for their attention to your claim and ask for a prompt response.

If you do not retain an attorney you must negotiate the amount of the settlement directly.  A word of caution; if you are at all uncomfortable about entering into negotiations, especially if speaking to someone who represents another party, it might be best to have an attorney handle the settlement for you. Do keep in mind though, that an attorney receives a percentage of your pain and suffering settlement monies, in exchange for his/her services.  Be sure to retain only an attorney who will work on a “contingency fee” basis.  This means that she/he does not collect anything until you have recovered and settle your case.  If an attorney asks for up front money from you, he/she should be avoided.

Should you be involved in a “crash” with an uninsured motorist, you will be in the position of negotiation with your own insurance company, but the process and procedures are the same. In this case you will send an “uninsured motorist bodily injury demand letter” to your own insurance carrier.

Once you have started negotiations directly, it will be difficult to have an attorney step in to complete the job, so be very sure of your decision before you take this route.  Offers to settle can be withdrawn, if not consummated, but this is a very difficult situation, and many attorneys will not take the case, if your efforts at direct negotiation have failed.

If you are skilled at documenting, presenting your case in writing and negotiating an agreement, consummating an auto liability settlement can be an enjoyable experience.  It can be a rewarding experience to have handled your own insurance claim to conclusion, much the same as doing a complicated vehicle repair successfully.  Good luck and the best wishes for a good monetary conclusion to your “auto liability demand”!