The demand letter is supposed to show the intent of the letter’s writer. He or she is supposed to appear ready to take legal action. Hence, the demand letter might persuade the recipient to come forward with the requested payment.
At the same time, the letter’s contents should make the size of the demanded payment clear. In that way, it should work to hasten the initiation of negotiations.
Approach to be taken by anyone composing a written demand
• Make details of accident clear. Do not assume that the letter’s recipient knows all the facts.
• Refer to any relevant documents, such as any contract that has stipulated the required actions of the claimant or the defendant.
• State the exact size of the demanded compensation. Include a list of the damages.
• Give a deadline for delivery of requested funds. Suggest a possible method for that delivery, such as making a series of payments.
• Explain the consequences if the defendant does not produce the payment. The stated consequences should entail taking a legal action, such as filing a lawsuit.
Why would mention of a lawsuit prove effective, if a client-lawyer team wanted to increase their chances for winning a fair and favorable settlement?
An insurance company does not want to be the target of a lawsuit. When a case must be decided in a courtroom, then members of the public have access to all of the allegations that have been made about the defendant, the insurance agency.
Insurance companies hope to gain new customers. Any exposure of questionable actions by a specific company could reduce the same company’s chances for benefitting from any new customers.
If a court were to rule that the policyholder for a given insurer should be held liable for a given accident, then the agency that had conducted business with the same policyholder would have to come up with the money for the court-ordered judgment. Insurance companies seek to avoid the need to making such a payment.
All insurance companies want to remain in the black. For that reason, some adjusters have developed tactics that can work to lower the payout to a given claimant. Still, those do not always work. Sometimes the delivery of a payout becomes a necessity.
Ideally, that payout gets made in a timely manner. If that is not possible, then the public exposure that is associated with a lawsuit could become a reality. An insurance company does its best to discourage the realization of the dreaded action, one carried out by a claimant, with the help of a personal injury lawyer in Richmond Hill.
That action would entail targeting the uncooperative insurance agency, by suing that same business. That explains the effectiveness of a threat that has made mention of the dreaded possibility.