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How should I respond to a demand letter?

On Behalf of | Jul 10, 2024 | Insurance Defense News

Receiving a demand letter is common for Denver insurance companies. A demand letter is a written request from an injured plaintiff asking you to pay damages.

A demand letter typically threatens litigation if the demand is not met. However, often it is meant to start the negotiation process.

There are some strategies that you can use when responding to a demand letter to increase your chance of a favorable result.

Do not ignore the letter

First, you should always respond to a demand letter. Failing to respond has many negative consequences. The other party will have no choice but to initiate a lawsuit against you, which will likely end up costing you more time and money.

Additionally, you have now given the other side a chance to argue that they offered you a chance to negotiate and resolve the matter without the need for litigation, but you did not respond. Courts usually frown on this.

Read the demand letter thoroughly. Analyze the other side’s arguments and determine their strength. Write down any potential responses to arguments or points you do not agree with.

The demand letter should include a list of facts to support the other side’s claim. Make notes on any discrepancies in the facts.

Decide what to do before responding

Evaluate your options. You could choose to comply with the demand, decide to negotiate or deny the demand altogether and start preparing for litigation. Consider the risks and benefits of each option before deciding what to do.

Respond within the requested timeframe. Although responding late may not necessarily result in immediate litigation, responding within the deadline shows you are taking their claims seriously.

Avoid inflammatory language

Keep the language in your response polite and respectful. Remember that your response could potentially be shown in court one day. Do not respond with personal attacks or accusations.

Only address the issues in the demand letter. Explain why you agree or do not agree with the claims being made and how any information you include supports your position.