Insurance Companies Demand Letter Response Time

If you or somebody you love has been injured due to the careless or negligent actions of another individual, business, or entity, you will likely be entitled to various types of compensation. For the vast majority of personal injury claims, victims will receive compensation through settlements with insurance carriers.

However, it can take some time for insurance carriers to respond to demand letters sent by injury victims or their legal team. Here, we want to discuss what a demand letter is as well as how long it may take the insurance carriers to respond.

demand letter response time

What is a Demand Letter?

We first want to clear up any confusion there may be about what a demand letter is. A demand letter is one of the first things that need to take place in order for an injury victim to receive compensation from an at-fault party. After an injury victim or their attorney thinks they have a full understanding of how much monetary loss they need compensation for, they will send the letter through the at-fault party’s insurance carrier requesting this compensation.

In general, a demand letter will contain all of the following:

  • The facts related to the incident
  • A description of how the incident occurred
  • Information about the extent of any injuries
  • Information regarding medical care, as well as any ongoing treatment
  • Copies of medical bills
  • Proof of any lost wages
  • Receipts for any out-of-pocket expenses

The demand letter will contain all this information as well as the actual amount of compensation that the injury victim is requesting. There will be a date in the letter that specifies when the injury victim expects a response from the insurance carrier. There will also be a subtle (but maybe not so subtle) reference to the possibility of filing a personal injury lawsuit should the demand not be met.

How Long Will it Take for the Insurance Carrier to Respond?

Response times from insurance carriers after a demand letter has been sent could range anywhere from a week or two to up to eight or nine months. The exact time it takes for the insurance carrier to respond will ultimately depend on the jurisdiction, the insurance company, the complexity of the claim, and the overall amount of money that has been requested. There is actually no law in Illinois that specifies how long insurance carriers have to respond in these situations.

Here, we want to examine the various factors that can influence how the insurance carrier response time:

  • The size of the claim. In general, the more compensation that an injury victim requests in a demand letter, the longer it will take for a response to come through. These larger claims will trigger intense scrutiny from the insurance carrier and require high-level approval within the company. Larger claims also tend to involve lengthier investigations before the incident is concluded.
  • The size of the insurer. Not all insurance carriers are the same size. Larger insurance carriers will typically have more resources and may be able to expedite the claim and provide a quicker response to a demand letter.
  • Whether there has been communication. What we mean by this is that if you have already corresponded with the insurance carrier before sending the demand letter, there may be less of a chance that there will be a delay. However, if the demand letter is the first time you have corresponded with the insurance carrier, there is a good chance that they will ask for additional information before responding.
  • The size of the insurance policy. Claims against larger insurance policies will typically carry more financial liability for the insurance carrier. This increases the chance that the insurance carrier will enhance the scrutiny on the claim.

What are the Possible Responses to the Demand Letter?

Insurance carriers can respond to demand letters in a variety of ways. This can include the following:

  • An acceptance of the full demand. This is not likely to occur, particularly for larger claims.
  • A counter-offer for a lower amount. Most insurance carriers will send back some sort of counter-offer, typically much lower than the initial demand.
  • A demand letter denial. The insurance carrier may outright deny the demands made in the letter.

As an injury victim, you need to be ready to handle any type of response that the insurance carrier returns for your demand letter. The best way to be ready for sending a demand letter and for responding to a counter-offer is to have a skilled personal injury lawyer by her side.

Will You Have to File a Lawsuit?

This is a question we receive a lot right around the time we send a demand letter on behalf of a client. The reality is that the vast majority of personal injury claims do not require that a lawsuit be filed against the at-fault party. However, if the insurance carrier or the at-fault party refuses to offer a fair settlement after a demand letter has been sent, or if they deny a claim altogether, it may indeed be necessary for the injury victim to file a lawsuit in civil court.

Decisions about whether or not to file a lawsuit should be made by a victim when working in consultation with their attorney. A skilled Chicago personal injury lawyer will have extensive history handling these cases and know when it may be necessary to file the lawsuit.

What is the Time Limit for a Lawsuit in These Cases?

Injury victims need to be aware that there is a limited amount of time for them to file a lawsuit against the alleged negligent party in these cases. The Illinois personal injury statute of limitations is two years from the date an injury occurs. This means that an injury victim must file a lawsuit within this two-year timeframe, or they will lose the ability to recover the compensation they are entitled to. This is important to keep in mind, especially if the insurance carrier response to a demand letter and their negotiations drag on for some time. This can push into the statute of limitations period.