Seizing the Settlement Season: When Demand Letters and Reserve Letters Matter Most

As the year draws to a close and the next one begins, personal injury attorneys are presented with one of the most strategically advantageous moments in the settlement lifecycle. This is not just a matter of convenience. It is the result of how insurers manage their budgets, allocate reserves, and evaluate claims. Sending well-prepared demand letters and reserves-related documentation during this time can significantly increase the likelihood of prompt, favorable settlements.

Year-End Behavior Inside Insurance Companies

According to Colossus: What Every Lawyer Needs to Know, insurers project and allocate their claims budgets on a calendar‑year basis. As year‑end nears, adjusters frequently have unspent allotments and are concurrently under pressure—both individually and organizationally—to close claims before the new cycle begins. Insurers operate on strict annual accounting and performance cycles. 

As the fourth quarter progresses, claims departments often work to close out files and utilize remaining budgets before they expire. Adjusters are under pressure to finalize settlements that have been lingering and to demonstrate claim resolution metrics that can impact their compensation, team performance evaluations, and annual reports to management.

In this environment, demand letters received in November and December can be reviewed with more urgency and, often, a more favorable eye. The logic is simple. If a file is close to settlement, an adjuster has a real incentive to close it before December 31.

The first few weeks of January are also high-value periods. Newly refreshed budgets, new reserve authority, and a desire to start the year with a clean slate make claims professionals more open to meaningful negotiations. Demands that land in early January can take advantage of this renewed energy and internal motivation.

Not Every Case Should Be Rushed

To be clear, not all cases should be settled simply because the calendar suggests it. Some claims require litigation to reach a fair result. However, for straightforward cases where liability is accepted, treatment is complete, and damages are clearly documented, timing can be leveraged for significant strategic gain.

Faster Reviews Require Smarter Submissions

Even if timing is optimal, the effectiveness of your demand still depends on how efficiently it can be reviewed. If a demand letter is lacking the proper data to trigger the insurer’s claims evaluation software, filled with long narrative, or lacking documentation, adjusters are likely to delay action or undervalue the claim.

Settlement Intelligence is designed to solve that problem. The platform produces insurer-optimized demand letters using a structured, efficient format. It guides attorneys through a workflow that ensures all key valuation factors are included and presented in the order claims professionals and their software systems expect. This reduces review time and helps increase offers.

Use the Loss Reserves Letter to Prepare the Ground

In addition to well-timed demand letters, attorneys can also use Settlement Intelligence’s Loss Reserves Letter to influence claim valuation earlier in the lifecycle. This letter is specifically designed to prompt adjusters to update their internal reserves when new evidence emerges, such as:

• A specialist’s report indicating a more serious or permanent injury
  

• MRI or other imaging results confirming pathology
  

• A surgical procedure or referral to a surgeon
  

• Evidence of long-term wage loss or job impact
  

• Any documentation that materially increases exposure
  
  

If an adjuster has reserved a claim at $50,000 and new records support a $100,000 valuation, failing to request a reserve update may delay or suppress the settlement offer. The Settlement Intelligence Loss Reserves Letter gives you a formal, professional mechanism to prompt reserve review before submitting your full demand.

This approach is essential when significant documentation arrives after the initial stages of treatment. Rather than rushing a demand letter based on incomplete evidence, attorneys can send a Loss Reserves Letter to ensure the insurer is preparing for a higher valuation, potentially transferring the claim to an adjuster with higher authority. Once treatment is complete and all damages are known, the demand letter can then follow with a stronger foundation already in place.

What Happens When You Submit Incomplete Demands?

Many attorneys submit demand letters before all records are available, hoping to “get something started.” This often backfires. Adjusters working under tight authority and performance targets may undervalue the claim and make a low offer. Reopening a case for reevaluation can be difficult and time-consuming, especially when reserves are outdated.

Instead, use the Loss Reserves Letter when key documentation arrives but treatment is not yet complete. Then submit your full demand when you have the complete package. This gives you a two-stage strategy that keeps claims on track and adjusters engaged.

Optimized for Insurance AI

More than 90% of insurers use evaluation software such as Colossus, ClaimIQ, or Liability Navigator. These systems are designed to read structured data input and apply internal scoring to certain types of damages and treatment. Settlement Intelligence is built to feed these systems exactly the type of information they require. The Settlement Intelligence AI Demand Letter workflow helps you extract and prioritize the most valuable claim elements, then presents them in a format designed for the software used by the insurer you selected to receive the demand.

This includes advanced damages categories such as “Loss of Enjoyment of Life,” “Duties Under Duress,” including exclusive access to forms and indices to immediately incorporate in your practice, and treatment timelines that align with severity scores in claims software.

By delivering your claim in a format that matches the insurer’s internal processing methods, you increase the speed of review, the likelihood of accurate valuation, and the quality of the initial offer.

Our Platform: Why Settlement Intelligence Leads the Field

To maximize case value and resolution speed, attorneys should use a three-step process:

1. Target demand letters when you can for late Q4 and early Q1, when insurer budgets and adjuster incentives align.
   

2. Use the Loss Reserves Letter when new evidence justifies a reserve update, even if the case is not yet ready for a full demand.
   

3. Deliver structured, complete demand letters that conform to insurer systems and include all necessary valuation evidence.
   
   

In a competitive legal environment, precision and timing are critical. Settlement Intelligence gives law firms the tools to act strategically, communicate efficiently with insurers, and improve financial outcomes for clients.

If you're preparing demand letters this season, make sure your timing and your strategy work together. The window for higher settlements is open—use it wisely. Subscribe today at app.demandletters.ai/signup