Demand letters and how negotiation works
The demand is the moment a pile of records becomes an argument. Most claims are resolved on the strength of this document, and most people never see one.
What is in a demand package
- Liability. What happened and why the other party is responsible, supported by the collision report, photographs, witness accounts, footage and the applicable Vehicle Code sections.
- The medical course. Every provider, every diagnosis, the treatment and its chronology — told as a narrative rather than dumped as a stack.
- The records and bills themselves, complete and itemised. Gaps invite discounts.
- Economic loss. Wages with employer verification, out-of-pocket costs, mileage, household help.
- Future care, where a treating doctor has stated it is needed, with costs.
- The human part. What the injury has actually done to this person's life, specifically. Not adjectives — the particular things they can no longer do.
- The demand figure, and a deadline for response.
The sixth item is where most demands are weakest and where the difference is largest. "The claimant experienced significant pain and suffering" is worth nothing. "He has not slept through the night since March, cannot lift his daughter, and gave up the league he had played in for eleven years" is worth something, because it is specific and checkable.
How the insurer reads it
The adjuster is working within an authority limit, often with software that produces a range from the diagnosis codes, treatment duration and billed amounts. Above their authority, a supervisor or committee decides.
Things that move the number up: clear liability, consistent treatment with no gaps, objective findings on imaging, a documented surgery or a recommendation for one, strong wage documentation, and a credible claimant with specific functional losses.
Things that move it down: treatment gaps, pre-existing conditions that were not addressed head on, inconsistencies between records, social media that contradicts the claim, low vehicle damage, and a claim presented with incomplete bills.
The first offer
The first offer is almost always low, and that is not an insult — it is the opening of a negotiation that both sides expect to have. Reacting to it emotionally helps nobody.
What matters more than the number is the reasoning. An offer accompanied by "we have applied 40% comparative fault" or "we do not accept the lumbar MRI is related" tells you exactly what the dispute is and what evidence would move it. An offer with no reasoning is just a number, and the next step is to ask for the reasoning.
When negotiation stops being useful
At some point the insurer's position stops moving. The question then is whether the gap is worth the time, cost and uncertainty of filing suit.
That is the client's decision, made with honest advice about what filing involves: another year or two, a deposition, a defense medical examination, discovery into your medical history, and no guarantee of a better outcome. Filing is sometimes exactly right and sometimes not, and the difference is rarely about pride.
Questions people ask
Their first offer was insultingly low. What does that mean?
Usually that it is an opening position rather than a judgment about you. What matters is the reasoning behind it — if they are applying comparative fault or disputing causation, that tells you what evidence would move the number. If no reasoning is given, the next step is to ask for it.
Can I negotiate my own claim?
You can, and for a very minor claim with no lasting injury it can be reasonable. The difficulties are that you cannot easily assess whether an offer is fair without seeing how comparable claims resolve, and that an unrepresented claimant is generally offered less — which is simply how the market works.
What happens if we cannot agree?
The decision is whether to file suit before the limitation period expires. That is your call, made with honest advice about what it involves: more time, a deposition, a defense medical examination, discovery into your medical history, and no guarantee of more money.
Related
Reviewed October 2026 by Simon Aziz Budhwani, Esq., the attorney responsible for this site. Legal statements here name the California code section they rely on, so you can check them rather than trust them. This is information about the law in general, not advice about your situation.
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