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Glossary

Demand letter

A letter that lays out the facts, injuries and losses in a claim and asks the insurer to pay a stated amount.

Last reviewed By the Editorial team 2 min read

General information, not legal advice. Talk to a licensed attorney in your state.

Quick answer

A demand letter lays out the facts of a claim, the injuries and the losses, and asks the insurer to pay a stated amount. It is usually written by a lawyer or by the injured person, and it normally opens settlement negotiations.

In a car accident claim#

Most demand letters are sent once treatment ends or the injured person reaches Maximum medical improvement. The point at which doctors expect no further recovery. Claims are often valued once you reach it. Glossary, so the full cost of the injury is known. A typical letter explains how the crash happened and why the other driver is at fault, describes the injuries and treatment, lists bills, lost wages and other losses with copies attached, and names an amount and a date to respond.

Some demands carry legal weight. A Time-limited demand. A settlement offer to an insurer that must be accepted within a stated period. Some states set rules for what such a demand must contain and how long it must stay open. Glossary must be accepted within a stated period, and some states set rules for it; in Missouri, it must stay open at least 90 days after the insurer receives it. When an insurer denies a claim or offers less, the NAIC model law expects it to give a reasonable and accurate explanation of the basis for a denial or a compromise offer. Our guide to the demand letter shows what to include, and settlement negotiation explains what happens next in the claim process.

Example#

Questions people ask

When is a demand letter usually sent?

Many people wait until treatment ends, so the letter can include every bill and the long-term effects. It still has to go out early enough to leave time for a lawsuit before the state's deadline.

Do I need a lawyer to write a demand letter?

No. Anyone can send one, and many small claims are handled this way. Our guide to handling a claim without a lawyer covers when that can work.

Sources

  1. Cornell Law School, Legal Information Institute, Wex: demand letter — general definition and purpose
  2. Revisor of Missouri, RSMo § 537.058 — time-limited demand requirements
  3. NAIC, Unfair Claims Settlement Practices Act (Model 900), Sec. 4 — as of October 2026

Last reviewed October 29, 2026 by the Accident Claim Facts editorial team. Found an error? Tell us.

Keep reading

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  2. The claim processDemand letterWhen a demand letter is usually sent, what goes into it, the documents that support it, state rules on policy-limits disclosure and time-limited demands, and…Reviewed
  3. The claim processSettlement negotiationHow offers and counteroffers work after a demand letter, what signing a release ends, and what has to happen with liens, Medicare and children's claims before…Reviewed
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