When someone else’s negligence causes you to suffer serious injury or property damage, you deserve to claim compensation from them. A personal injury attorney can advocate for your right to recover damages by sending a demand letter directly to the liable party’s insurance company. So you might understandably wonder: What happens after my lawyer sends a demand letter? Will the insurance company respond quickly, or will they delay? How long will it take to reach a fair settlement? Here’s what you need to know about the process after a demand letter is sent.
What Is a Demand Letter in a Personal Injury Case?
As the name implies, a demand letter states the injured person’s intention to claim compensation from the party accused of negligence. The letter outlines the details of the accident and explains the full extent of the damages sustained.
The “demand” is typically a specific amount of compensation the lawyer is seeking for their client. The letter encourages the insurance company to extend a settlement agreement or engage in negotiations without the need for either side to seek further legal action.
A well-constructed demand letter can lead to a better outcome for your case. It demonstrates that you know what your injuries are worth and that you have a lawyer who demands that the insurance company takes you seriously. However, it is often just the first step in the settlement process. The goal is to eventually sign a settlement agreement that fully compensates you for your damages.
How Will the Insurance Company Respond to the Demand Letter?
Before the settlement process truly begins in earnest, the insurance company must send a response to the demand letter. Before that, though, they will conduct their own review of your claim and send adjusters to investigate the accident with a focus on their own best interests.
The insurance company may then respond by meeting your demands or extending a counteroffer. Either way, you and your legal team should be ready to negotiate. Even if the insurers seem ready to accept your claim, there is always a possibility that they are trying to lowball you.
Insurance companies may deliberately delay their response to pressure you into accepting a lower settlement. They might request unnecessary documents, claim they need more time to evaluate your case, or even ignore your letter entirely. Your lawyer will follow up and apply legal pressure as needed to keep the process moving.
If the insurance company ignores your claim or denies it outright, you can rely on your lawyer to follow up appropriately. This may entail disputing the insurer’s decision or taking additional legal action against them for acting in bad faith. Filing a lawsuit for bad faith insurance practices may be a necessary step, but it may result in additional compensation for the inconvenience caused to you.
How Do Personal Injury Settlements Work?
After the insurance company responds to your demand letter, you can begin the personal injury settlement process. There are a few steps in this process. Your personal injury attorney can handle every aspect of the case for you, but it is helpful if you remain open and communicative along the way
Determining Damages
The first step in the settlement process is to precisely determine the extent of your damages. Your legal team will likely complete this evaluation before they even send a demand letter, but it is important to keep in mind that new facts can change the determination. After examining the evidence presented by the other side at the negotiation table, you might realize that your recoverable damages are greater than you thought.
Evidence Discovery
Discovery is a necessary step during which both sides submit all the evidence they collected from their respective investigations. This ensures that everyone knows all the relevant facts. Hiding evidence is a serious violation, so it is important for both sides to cooperate so negotiations can proceed in good faith.
A deposition is a major part of evidence discovery. This is testimony provided by the individuals involved in the accident. While a deposition does not occur in a court of law, it is a testimony given under oath and recorded as evidence that either side can use as evidence for the rest of the case.
Negotiating a Settlement
With all the facts and relevant information out in the open, negotiations can proceed between your legal team and the insurance company. The negotiation process often consists of many offers and counteroffers, with each side leveraging the evidence to justify their demands. Lawyers negotiate settlements by using their knowledge and experience to clearly demonstrate the extent of the other person’s liability.
Reaching an Agreement
When negotiations finally reach a compensation amount that satisfies both sides, the insurance company will draft a settlement agreement. This is a binding document that outlines their obligation to pay you the agreed-upon amount.
When you sign this agreement, however, it also means you agree to not pursue any further action or compensation for the same accident. Consult with your lawyer and make sure that the amount you are receiving is adequate to cover your damages.
What Is a Reasonable Settlement Offer?
A reasonable settlement offer is one that adequately covers all of your current and future losses in relation to the other party’s degree of fault. If your injuries require long-term care or ongoing treatments, those costs should also be factored in.The recoverable damages that a reasonable settlement should cover include:
- Medical expenses
- Ongoing or future treatments
- Property damage
- Lost wages
- Pain and suffering
If the other person is 100% liable for your accident, you should expect them to fully cover all losses you incur as a result. In comparative negligence states like Arizona, Colorado, New Mexico and California, a reasonable settlement offer might not cover all of your damages if the court deems you to be partially at fault for the accident.
How Long Does a Personal Injury Lawsuit Take?
The duration of a personal injury lawsuit, from the date your lawyer sends a demand letter to the day you finally sign a settlement agreement, can be several months or even multiple years. This is because a personal injury lawsuit entails numerous back-and-forth arguments between your legal team and insurance company.
If the evidence is heavily in your favor and the other person’s liability is crystal clear, the insurance company may relent easily and offer you a sufficient settlement within just a few months.
If an insurer thinks they can save their company some money by arguing relentlessly and prolonging your case by several months, they will likely do so. If it becomes necessary to sue the other party to secure a favorable settlement, that can add even more time to the process.
What Happens if My Case Goes to Trial?
When you initially send a demand letter, it is reasonable to expect that you will not have to go to trial. The vast majority of personal injury cases resolve outside of court. It is in the best interests of both parties to save time and money by arriving at a mutually-agreeable solution through private negotiations.
However, you might have to take the matter to court if the insurance company refuses to offer adequate compensation to cover your damages. If this happens, your lawyer will alter their strategy and present the evidence in a way that best explains the circumstances to a judge and jury. Litigation is a specialized field, so it is worth your while to work with an experienced trial lawyer.
Be aware that litigation can be contentious, and that scheduling court dates can add months or even years to the timeline of your case. The benefit of going to trial, though, is that the other side must abide by whatever ruling the judge hands down. Securing a favorable verdict in court can guarantee that you recover the damages owed to you.
Are There Alternatives to Courtroom Litigation?
When negotiations come to a standstill, it is not always a given that you must resort to litigation to make progress. There are alternative dispute resolution methods that involve an unbiased third party to facilitate productive discussions.
Mediation is a more guided approach, when compared to standard negotiation, that relies on the support of an expert mediator to help the two sides reach a compromise. Arbitration is a similar process, but it takes the method one step further by allowing the arbitrator to issue a ruling. This ruling is not legally binding, but the negotiating parties can use it to strengthen their respective arguments.
Alternative dispute resolution methods might not be effective if the other party is acting in bad faith. Going to court might be the only way to hold the other party accountable in this type of situation.
How Long After a Demand Letter Can I Expect a Settlement?
The time it takes to receive a settlement after sending a demand letter depends on how quickly the insurance company responds and how receptive it is to negotiations. Most insurance companies respond to a demand letter in 30 to 60 days. If they make a reasonable offer, settlement negotiations could conclude within a few months. However, if they delay or dispute liability, the process may take six months to over a year.
Your personal injury attorney has the skills and resources necessary to hold the insurance company accountable and pressure them to prevent unnecessary delays. Even when it feels like insurers are dragging their feet, you can trust that your legal team is doing everything in its power to elicit a timely settlement.
Can You Reopen a Lawsuit After You Get a Settlement?
You usually cannot reopen a lawsuit after you get a settlement. This is because most settlement agreements include a dismissal clause stating that the plaintiff cannot pursue further legal action regarding the related accident. You legally agree to this clause by signing the settlement agreement.
Even so, you might have a valid reason to attempt to reopen your lawsuit. It may come to your attention later that the amount of compensation you accepted does not fully cover your ongoing medical costs, for example. In these situations, there are certain exceptions which may allow you to reopen the lawsuit.
One such exception is when you can prove that the other party committed fraud during the settlement process. If you accepted an unsatisfactory settlement because of the other party’s fraudulent or coercive behavior, a judge may allow you to initiate the settlement process again from the beginning.
Another example is when a mutual mistake occurred that led to an unreasonable settlement. If it later becomes clear that both sides overlooked significant evidence, then revisiting the settlement is fair and just.
Challenges With Accepting a Lowball Settlement
It is not easy to reopen a lawsuit after you accept a settlement, so it is important to understand what can happen if you agree to settle for a lowball amount. Agreeing to receive less compensation than you deserve can lead to financial hardships later on. You might develop medical issues related to the accident, but cannot afford to treat them.
It may be tempting to quickly accept an early offer so you can put this difficult situation behind you, but it is worth your time and effort to fight for the full amount of compensation you deserve.
How Do Lawyers Get Paid?
Most personal injury lawyers operate on a contingency basis, meaning you only have to pay them if and when you receive a settlement check from the insurance company. Just because a lawyer agrees to represent you and sends a demand letter on your behalf does not mean you owe them any fees then and there.
At Sargon Law Group, our personal injury attorneys also operate on a contingency basis. We offer free consultations, during which we review your case and give an initial evaluation of how much your claim might be worth. If you decide to hire us, we can handle every aspect of your personal injury claim — from sending a demand letter all the way to drafting a settlement agreement — all without paying us a dime until you get your check.
Call Sargon Law Group Today
When you hire Sargon Law Group to handle your personal injury claim, we make sure you are not left in the dark at any point in the process. We want you to know what happens after your lawyer sends a demand letter, how long you can expect to wait for your settlement and whether or not the settlement offer is reasonable. Contact us today with any other questions you might have.