Personal injury cases most frequently involve settlements that come from insurance companies. The losses sustained by the plaintiff will be compensated for by the defendant’s insurance coverage. But, insurance policies have limits over what kinds of incidents they cover and how much they can compensate for these claims.
Knowing the maximum compensation amount that the insurer provides will impact the settlement you can receive for your case. Therefore, this information is crucial in helping your attorney create a policy limit demand letter.
This blog post will guide you in understanding policy limit demands in California.
What Is a Policy Limit Demand?
A policy limit demand notifies the insurance company to pay the maximum amount available under the defendant’s policy.
After receiving a demand letter, the company will determine if they will comply or not. Should they choose not to comply, they will have to undergo a litigation process which may lead to a jury trial. Attorneys representing the injured will carefully assess the evidence, weigh both sides’ strengths and weaknesses, and consider relevant legal precedents. New legal standards established in California governs how policy limit demands are made in civil injury cases.
Policy Limit Demand in California
As of January 1, 2023, This law aims to streamline the use of time-sensitive demands aimed at settling various liability claims—such as those related to auto accidents, motor vehicles, commercial enterprises, and homeowner incidents—before initiating a lawsuit.
A “time-sensitive demand,” defined by the new statute, refers to a pre-litigation offer extended to a defendant with liability insurance seeking to settle a claim for personal injury, property damage, bodily harm, or wrongful death. The offer is contingent upon acceptance within a specific time frame and the insurer’s liability coverage limits.
Key Requirements of Senate Bill 1155 for Time-Limited Demands
- Written Documentation: The demand must be documented in writing and explicitly identified as a “time-limited demand.”
- Response Timeline: If the demand is sent electronically, a minimum response period of 30 days is required, or 33 days if sent via regular mail.
- Policy Limit Demand: The demand must clearly outline the terms for settling the claim within the insurance policy’s coverage limits and include provisions for satisfying all related liens.
- Release of Liability: The demand must include a full release of liability for the incident.
- Essential Claim Information: The demand must specify the date and location of the loss and include the claim number if available. Additionally, it should describe all known personal injuries sustained by the claimant.
- Proof of Damages: Supporting evidence of the claim, such as medical records and bills, must accompany the demand to substantiate the claimed damages.
Upon receiving a policy limit demand, the insurance company may request more information without considering it as a rejection. However, should the insurer decide to decline, it must do so in writing, providing clear reasons before the demand’s expiration.
Consequently, the California Senate Bill 1155 aims to clarify and structure the process of settling civil injury claims, ensuring both claimants and insurers have a well-defined framework to operate within.
Writing an Effective Policy Limit Settlement Demand in California
A policy limit settlement demand, often referred to as a personal injury demand letter, is a formal document that the plaintiff’s attorney sends to the defendant’s insurance company. So, this demand letter is the official request for the insurance company to pay the maximum amount available under the defendant’s policy to settle a personal injury claim.
Include Comprehensive Details of the Incident
Provide a clear and detailed account of the accident, including the date, time, location, and sequence of events because this sets the claim’s foundation and demonstrates the incident’s seriousness.
Document All Damages and Losses
List all damages incurred, such as hospital-related expenses, lost income, and damage to property. Then, support these claims with relevant evidence, like medical records, repair bills, and employment documentation.
Gather and Present Strong Evidence
Attach supporting evidence such as police reports, witness statements, photographs, and other documentation that strengthens the claim since it helps to establish the defendant’s liability and the extent of the plaintiff’s damages.
Specify the Policy Limit
Clearly state that the demand is for the policy limit or a specific amount within the policy’s coverage because this makes it explicit that you seek the maximum compensation under the defendant’s insurance policy.
Set a Reasonable Deadline
Specify a response deadline, typically 30 days. Providing an explicit deadline creates urgency and encourages prompt settlement discussions.
Highlight Potential Bad Faith
Failing to settle within policy limits exposes the insurer to a potential bad faith claim. This happens if they neglect to protect their insured from an excess judgment. The insurer can be held liable for the entire judgment amount, including any portion that exceeds the policy limits.
Be Concise and Professional
Keep the letter concise, clear, and professional. Avoid emotional language or unnecessary details, focusing instead on the facts and the strength of the evidence.
Choose FCA for Accurate Insurance Research
Knowing the defendant’s insurance policy limits is essential for any law firm in personal injury cases. Without this critical information, planning medical treatments and setting realistic settlement goals effectively becomes challenging.
Many states don’t require insurance companies to disclose policy limits upfront, leaving the injured party and their legal team uncertain about the available recovery funds. This lack of transparency can make it harder for doctors and attorneys to make decisions about treatment plans and legalities.
Not knowing the policy limits can disrupt your case and possibly lead to an undervalued settlement, preventing your client from receiving the total compensation they deserve.
With FCA’s Policy Limits Search, you can remove uncertainty and streamline your insurance research process.
Final Thoughts
Comprehending the nuances of policy limit demands in California is vital for maximizing your personal injury settlement. The process involves careful preparation, from understanding the legal framework of Senate Bill 1155 to crafting a compelling and well-supported demand letter. By adhering to the key requirements and presenting a solid case, claimants can significantly increase their chances of securing the full compensation available under the defendant’s insurance policy.
Remember, a well-crafted policy limits demand, pushes for a fair settlement and protects against the risks of going to trial. Working closely with your attorney ensures that your demand letter meets all legal standards and effectively advocates for your rights.
