By David Goguen , J.D. · University of San Francisco School of Law
Updated by Dan Ray , Attorney · University of Missouri–Kansas City School of Law
In any kind of personal injury case—whether it's a car accident, slip and fall, medical malpractice, or something else—the demand letter sets the stage for settlement talks. An effective demand letter describes the facts of your claim, sets out your best argument for why the other party is legally responsible (liable), and summarizes your "damages" (losses caused by the other party's wrongdoing).
Need Background Info?In this article, we'll explain the formula lawyers and insurance companies sometimes use to calculate damages and show you how to:
"Damages" is just a legal term used to describe the money a person suing (the "plaintiff") might be awarded for a winning legal claim. In most personal injury cases, plaintiffs get "compensatory" damages, intended to compensate them for their injuries. In rare cases, plaintiffs might also be awarded "punitive" damages meant to punish the wrongdoer (the "defendant"). Our focus in this article is on compensatory damages.
Compensatory damages come in two kinds—economic damages (also called "special" damages) and noneconomic damages (also called "general" damages). Economic damages tend to be easy to quantify in dollars. Medical bills, pharmacy charges, and lost wages are common examples.
Noneconomic damages are more difficult to value than economic damages. They are meant to compensate plaintiffs for intangible losses associated with an injury, like "pain and suffering," emotional distress, disability, disfigurement, and loss of enjoyment of life.
There's no one rule for how to value noneconomic damages. Most personal injury lawyers and insurance adjusters multiply your total medical expenses (also called "medical specials) by a number between 1 and 5 (the "multiplier") to come up with an estimate of your noneconomic damages.
In a typical case, a multiplier of two or three times medical expenses might be used. But if the facts of the case are extreme and the injuries are severe and permanent, the multiplier is likely to be even higher—say, four or five times medical expenses. The same is true if the injuries have caused disfigurement or significant disability. If your case involves these kinds of injuries, you'll be best served by having an experienced personal injury attorney handle the case for you.
The size of the multiplier depends on many factors, including the type of injuries you suffer and the medical treatment you receive. Adjusters and personal injury lawyers typically divide physical injuries into two main categories:
Sometimes, physical injuries are easy to see and understand. We've all suffered cuts and bruises. Broken bones and torn ligaments show up on an X-ray or CAT scan. Everyone knows that these injuries are real, that they cause pain, and that they might need both medical treatment and plenty of time and rest to heal. These kinds of injuries sometimes are called "hard" injuries.
Categories of hard injuries include:
Other physical injuries—injuries that can't be seen—are more difficult to describe. These are sometimes grouped together as "soft tissue" injuries and include things like muscle sprains or tendon strains. As with more obvious injuries, these are real and they're painful. But it's harder to explain to others (who haven't experienced them, anyway) why these injuries can be temporarily disabling and need proper medical care.
Insurance companies tend to regard soft tissue injuries as less serious than hard injuries and usually assign a lower multiplier to them. In your demand letter, you'll need to describe in detail the mechanics of your soft tissue injury.
In a car wreck case, for example, describe how your head and neck uncontrollably snapped forward and then backward and violently bounced off the headrest. Or how a side impact slammed your body into the driver or a passenger door.
If it's a slip and fall case, detail how you landed with all your weight and the force of the impact or your low back, your shoulder, or whatever part of your body first impacted the ground.
In most cases, you'll know instantly if you're injured. A broken arm, for instance, is immediately painful. Other times, though, your injury might not appear right away. This sometimes happens with soft tissue injuries like whiplash.
If you've been in an accident and think you might have been hurt, start keeping notes to record the onset and severity of symptoms like pain, soreness, and stiffness. Your notes will help you later on when you sit down to write your demand letter.
The value of your personal injury claim is influenced by a range of factors, but none is more important than the way you detail your injuries and medical treatment. Start with the day of your injury and move forward in time chronologically, describing all of your physical injuries completely and in detail.
The same goes for all of your hospitalizations, surgeries, medical treatments, therapy, and other rehabilitation. Be sure to mention things that were particularly painful like wound cleanings, burn debridements, dressing changes, and range-of-motion exercises.
Explain how your injuries left you dependent on mobility or assistive devices like crutches, a walker, a cane, or a wheelchair. List any alterations you had to make to your home to accommodate these devices.
Describe nursing or other in-home care you needed for assistance with daily activities like bathing, bathroom and personal care, dressing, cooking, cleaning, shopping, yard work, and home maintenance. List these services in your demand letter even if they were provided by friends or relatives.
Has your doctor told you to expect any permanent limitations or disabilities? If so, describe them fully, as these can significantly increase the value of your claim. Make sure you let the adjuster know if your doctor has said your condition likely will progress or worsen with age. If your injuries involve any joints, for instance, you might develop arthritis in those joints as the years go by.
Along the same lines, if the doctor has said you might need future medical treatment, make sure you include that in your demand letter and consider talking to a lawyer. Understanding and valuing future medical expenses is complicated.
As you're describing your physical injuries, limitations, and treatments, be sure to discuss the pain and suffering, emotional distress, depression, anxiety, and fear you experienced. Detail how your injuries left you disabled or disfigured, both short-term and long-term.
With some injuries—especially soft tissue injuries that can't be seen and are difficult to describe— things like pain, emotional distress, depression, and anxiety might be the biggest factors in your settlement. Take the time to explain them fully.
But even in cases where your physical injuries are obvious, you still need to emphasize your emotional injuries. How does it feel when people stare at facial bruising or scarring? Or when young children point and make comments?
What's it like to walk upstairs with crutches or a walker, or to walk with a limp? How did you feel when you had to ask your ten-year-old child for help retrieving items from the pantry, or when you were unable to bend down and pick up your newborn child?
Your accident and the resulting injury may have left you more anxious or fearful of common, everyday activities. It isn't unusual, for instance, for someone who's been in a bad car wreck to be fearful of driving or even riding in a car.
An elderly fall victim is likely to be much more hesitant to climb or descend stairs, walk on uneven surfaces, or do things like get in or out of the bathtub. Post-accident fear and anxiety are common. If you've experienced them, say so.
If you've sought professional help from a psychologist, social worker, or other therapists to deal with your emotional injuries, you need to detail the care you've received in your demand letter. You can get compensation for these expenses, just like any other medical expenses. In addition to talking about your therapy, identify any antidepressant, anti-anxiety, or similar medications you've been prescribed.
You may feel embarrassed or uncomfortable putting these things into a letter that's going to a complete stranger. But these are all injuries for which you're entitled to compensation. Keep in mind, too, that none of what you're describing will be new or shocking to the insurance adjuster. This is a person who handles hundreds of claims like yours every year. Finally, don't forget that you're in this spot because someone was negligent and hurt you. You have nothing to be embarrassed about.
When describing your injuries and medical treatments, use the terms you find in your medical records. The insurance adjuster who reads your letter will understand medical terminology and will find medically-correct descriptions to be more informative.
For example, it's okay to write, "I suffered a complete transverse fracture of my left tibia that required fixation by intramedullary nailing" if that's how your injury is described in your medical records. A medically accurate description conveys much more information than simply saying, "I broke my left shin bone and required surgery."
You're probably not familiar with medical terms, but not to worry. Sites like WebMD provide lots of information about medical conditions, injuries, and treatments, and there's a medical dictionary available, too.
Once you're done describing your injuries and treatment, list each healthcare provider who treated you and the total amount charged by each. Include providers who you may not have personally seen but who provided you with goods or services, like radiologists, labs, and medical equipment companies. Be sure to include nursing and other in-home care providers.
Check that the list matches your medical billing records, because you'll need to provide copies of all your bills to the insurance company along with your demand letter.
In a separate list, itemize any other expenses for which you were out of pocket. This would include, for example, payments to medical transportation companies if you weren't able to drive yourself to medical appointments. The cost of any home alterations or remodeling to accommodate your injuries belongs here as well. If you had to pay for things like home maintenance and upkeep or lawn care, this is where you'd list those charges.
After you outline your injuries, treatment, and medical expenses, describe all of the other ways your injuries have cost you. Every personal injury case will look a little different when it comes to specific kinds of damages, but here are some common categories.
After an accident that leaves you hurt, you'll likely miss time from your job. Keep track of the number of days you were gone and the earnings you lost. If you needed help from coworkers to do your work once you were able to return to the job, provide those details.
If you're self-employed, mention not only the days you missed but any customers, jobs, or opportunities you lost because you weren't able to work, solicit new jobs, or bid on projects.
You're not required, at the demand letter stage of your case, to explain why you were unable to work. If the adjuster wants to challenge your claim that you couldn't work, you can take that up during later negotiations.
And you don't have to say whether you took sick leave, vacation time, or paid time off. Those are benefits you earned and that you lost as a result of your injury. The insurance company doesn't get credit for them. The time you missed and the earnings you lost are the only things that matter.
If you're irregularly or seasonally employed, explain how you arrived at the total figure for lost income. Perhaps your busiest work season is during the summer school break or the year-end holidays. Maybe your income depends on an annual crop harvest or animal migration. If so, your income can be impossible to predict exactly, so you don't have to claim that the figure you give is "to the penny."
Just explain what basis you used for figuring your rate of income—a weekly amount based on your previous year's income as shown on your tax return, for example, or a monthly amount based on the months immediately preceding the accident—and refer to whatever documents you have to back up that income and your missed work.
If someone is legally responsible for your personal injuries, that person is also liable for any damage caused to your property in the same accident.
Car accident claims almost always include property damage, but property damage can happen in other types of accidents too. For example, if you crushed your new phone when you fell on a slippery store floor, you should ask for compensation for your phone in your demand letter. Be prepared to show receipts for the cost to repair or replace damaged property.
Property damage claims are not part of the damages formula for figuring injury compensation. They are figured separately and might settle more quickly than related injury claims.
Your demand letter should end with a total of all of your damages and a demand for that amount. But how do you calculate that final demand?
As mentioned above, first you've first got to total up your medical specials. Then you apply a multiplier to value your noneconomic damages. In a typical case, a multiplier of two or three is common. If your injuries are severe and permanent, especially if they include permanent disability or disfigurement, a multiplier of four or five might be appropriate. If the facts giving rise to your injuries are particularly shocking, your injuries are catastrophic, or there are other aggravating factors involved, the multiplier might be more than five.
As you consider how to value your noneconomic damages, keep a couple of things in mind. First, this is where your later negotiating room will be. And the insurance adjuster won't jump at your first offer (unless it's way too low), so there will be negotiations.
Normally, you want full compensation for your medical bills, lost wages, and other out-of-pocket expenses, so you likely don't have much wiggle room there. You should start, then, with a multiplier that gives you a higher value for your noneconomic damages than what you're really willing to accept. Start high, so you've got room to come down.
Second, if you think your case should involve a multiplier greater than three, hit the brakes. If your case is really worth that much, it means your injuries and damages are severe. You need to think about getting an experienced personal injury lawyer involved.
An attorney can help you evaluate your personal injury claim and tell you what a realistic settlement range is likely to be. If you tell the insurance adjuster you want ten times your medical expenses for a routine car wreck or slip and fall case, the adjuster knows instantly that you're in over your head. You and your claim won't be taken seriously.
Before you start writing your demand letter, make sure you've contacted all your treating doctors, hospitals, therapists, and other providers and ordered copies of the records and bills related to your injuries and treatment. Do the same for home health care providers, medical equipment companies, and any others who provided you with goods or services.
If you're making a claim for lost wages or income, you should contact your employer's human resources office and ask for a letter proving the amount of your loss.
Along with your demand letter, send the insurance company copies of all documents, records, letters, bills, and other written proof you've gathered to support your injuries and damages. Keep the originals for your own files.
If you've got lots of attachments, label each document or set of documents as "Attachment 1," "Attachment 2," and so forth. Refer to the attachment numbers in your demand letter.
Supporting documents to enclose with your demand letter might include:
If the facts of your case are straightforward and your injuries are fairly minor, you can probably handle settlement through a demand letter on your own. See our collection of sample demand letters to get a sense of what yours might look like, what to include, and how much to demand in settlement. And learn more about what happens after you send your demand letter.
If your case involves complicated facts, thorny legal issues, or serious injuries, talk to a lawyer. A lawyer can help you get the best outcome possible in your case. You can connect with a lawyer directly from this page.
This article is an adaptation of an excerpt from the book How to Win Your Personal Injury Claim, by attorney Joseph Matthews (Nolo).