Settlement Intelligence co-founder, Aaron DeShaw, talks about the six types of demand letters in auto and premises liability cases.
There are six different types of demand letters in personal injury cases.
1. The One Page Demand Letter
The first type of demand letter is the one page demand letter. With a one page demand letter, you're going to just provide a basic summary of the case. You will include all of the medical records, bills and related records in the demand package for the adjuster to review on their own to obtain the information of value in their insurance claim software. This short demand letter also requires that the adjuster create their own narrative about what the case is about.
These short demand letters can be effective in certain types of cases such as clear policy limits cases, but is not a good choice for most personal injury cases because they depend upon the insurance adjuster to find the information of value in a claim.
2. Pure Narrative Demand Letters
The next type of demand letter is the pure narrative demand letters. These are the most common style of demand letters used by personal injury lawyers. These are somewhat effective, particularly for large loss cases, but they're not very effective for small to moderate size auto cases, which constitute the vast majority of auto and premises liability claims.
The primary problem with pure narrative demand letters is that lawyers often focus for many pages on pain, when insurers almost all determine the value of noneconomic damages through computer programs based upon the ICD injury codes. The result is that pure narrative demand letters focused mostly on the client's pain provide very little to support the way insurers actually evaluate noneconomic damages.
3. Medical Timeline Demand Letters
The next type is medical timeline demand letters, which are essentially just creating a medical timeline and putting that within the demand letter itself. Medical timeline demand letters are not effective, because the insurance companies tell the adjusters to look at the records themselves and create their own medical timeline, not to read the attorneys.
Over the past 20 years, we've been told by both claims adjusters and claims supervisors that medical timeline style demand letters are set aside and disregarded. As a result, medical timeline demand letters are not very effective.
Other AI demand letter startups use medical timeline style demand letters, which demonstrates their lack of basic knowledge of how personal injury claims are actually evaluated.
4. Demand Letters Optimized for Insurance Claim Software
This style of demand letter is based upon insurance claim software. Over 90% of all auto claims in the United States, and a high percentage of premises liability claims are evaluated by claim software. The concept of these demand letters is to obtain the information used by insurance bodily injury software and then provide the claim information necessary for to help the software to generate the most accurate value for the case.
Ultimately, for the vast majority of auto and premises liability cases, providing this type of demand letter that sets forth all of the factors that are of value to the insurance company, in the order that the insurance adjuster needs it for their particular claim software system, is going to be by far the most effective method of getting the maximum settlement offer.
The highest quality of this type of demand letter would optimize the letter based upon the software used by a particular insurer. Since different insurers use different software, having an expert in the claim software is necessary to determine which factors are of value to an insurer and in what order the facts are most optimally discussed in the demand letter.
Settlement Intelligence helps guide lawyers and legal staff to write demand letters optimized for the insurer that will evaluate your client's claim. Settlement Intelligence helps you develop the optimized demand letter information, layout and language to trigger maximum claim value regardless of whether the demand letter is being sent to State Farm, Allstate, GEICO, Liberty, Progressive or another insurance company. Many law firms report a 300% increased average case value after implementing demand letters using Settlement Intelligence. Others report that the increase in claim value results in settling double to triple the number of cases before litigation.
Licenses are available for every size personal injury law firm from solo lawyers to high volume personal injury practices. Find the right license here.
This style of demand letter is highly effective for the vast majority of personal injury claims, that do not require a narrative for a specific type of injury (discussed below.)
5. Mixed Tables and Narrative Demand Letters
Another type of demand letter is the software optimized demand letters discussed above, but with detailed narrative on more extensive injury claims. There are approximately 22 different types of injuries that require a narrative explanation.
Some of the types of injuries that must be discussed by narrative include; wrongful death cases, quadriplegic cases, traumatic brain injury cases, burn injuries, and PTSD. Those injuries require a specific type of explanation. The present version of Settlement Intelligence's Professional, Enterprise and Unlimited licenses create starting narrative language for traumatic brain injury and PTSD cases, generating a basic explanation of the type of injury. You can go into the generated demand letter and create more detail for a fully developed narrative about those specific type of injuries to provide additional claim value. Settlement Intelligence is actively developing narrative discussion text for more of these specific injuries.
This style of demand letter is highly effective for all claims, particularly large loss claims with more serious injuries.
6. Bad Faith Demand Letters
There are also insurance "bad faith" demand letters. If the insurance company doesn't make a good offer based upon the true facts of the case, you can send a follow up letter to their low offer and let them know that they are going to be subject to either first party or third party bad faith, citing the case law of the applicable state.
To better understand how insurers deny, delay and defend insurance claims see Trial Guides' books, From Good Hands to Boxing Gloves and Running with The Bulls. These books will help you set forth the applicable statutes and industry standards regarding the appropriate handling of claims and how these are being violated by failure to make a good faith offer. These style demand letters are used primarily for this purpose and are most effective for lawyers with a trial history of excess verdicts and / or experience handling insurance bad faith claims.
To generate better auto and premises liability demand letters that will increase settlement offers, find the right Settlement Intelligence license for your law firm.