At the time you send the settlement demand letter, the insurance company is operating with incomplete information. You have selectively presented them with only the strongest aspects of your case. For example, if you were in an accident just a year before the accident case you are trying to currently settle, you might choose not to admit that fact in your settlement demand letter. You are not legally required to do so at this stage. Your doctor, however, may have included that fact in his or her medical report, which would obviously alert the insurance company to this issue.
The insurance company knows that it is getting incomplete information. It is only after suit is filed and the discovery process is completed that the insurance company can know for sure that it has a complete picture of you and your case. These days, you cannot expect to settle your case for full value until after you have successfully made it through depositions and discovery. (See Chapter 9 for a thorough discussion of depositions and the discovery process.)
You might be asking yourself at this point why you should have even gone through the settlement demand letter process. You very well may have nothing to lose by simply skipping this step entirely and moving right to filing a lawsuit. However, if your injuries are relatively minor, you may be able to settle your case without filing suit. The settlement demand letter is indispensable if you hope to settle such a case without actually filing suit.
Skipping the Demand Letter
If your injuries are more serious, you may want to jump right to the lawsuit stage. That is the only way to get full value for a larger case. However, even in larger cases, going through the process of sending the settlement demand letter has benefits. Just writing the letter helps to organize the file and understanding of it. Organization is crucial, and a comprehensive settlement demand letter forces you to organize your thoughts and your file.
Also, if you bypass the pre-suit negotiation stage, you may offend the claims representative handling the case. It is improper protocol in some people’s eyes to skip this stage. If the representative feels disrespected, it may be very hard to get a fair settlement offer from this person later.
