In this guide
The short version: after a demand letter, the insurer acknowledges it, reviews your records and fault, and then makes an offer, denies the claim or disputes part of it. Negotiation follows. There’s no fixed timetable — questions from the adjuster, disputes and unfinished paperwork are what slow it down. Your lawyer must tell you about every offer, and the decision to settle is yours.
The steps after a demand letter
1The insurer acknowledges the demand
- What happens
- An adjuster confirms it received the demand package and opens or updates the file.
- What to know
- If weeks pass with no acknowledgment, your lawyer should follow up in writing.
2The adjuster reviews and asks questions
- What happens
- The insurer checks fault, your medical records and bills, and may ask for more documents or a recorded statement.
- What to know
- Each request pauses the review until it’s answered — answering quickly keeps things moving.
3An offer, a denial or a dispute
- What happens
- The insurer makes a first offer, denies the claim, or disputes part of it (fault, treatment, or the amount).
- What to know
- An offer or denial should come with an explanation of its basis. Ask your lawyer for it in writing.
4Negotiation
- What happens
- Your lawyer responds with a counteroffer and supporting evidence; the two sides go back and forth.
- What to know
- Your lawyer must tell you about every offer. A counteroffer ends the previous offer.
5Settlement — or a lawsuit
- What happens
- You reach an agreement, or your lawyer files suit to protect the claim and keep negotiating.
- What to know
- Watch the filing deadline: negotiating doesn’t stop your state’s statute of limitations.
To see which of these steps your own case is on — and how long each has taken — use the settlement timeline tool.
What insurers are expected to do
State insurance laws set standards for how claims are handled, and many are based on a model law from the National Association of Insurance Commissioners (NAIC). Its list of unfair claims practices includes:
- “Failing to acknowledge with reasonable promptness pertinent communications with respect to claims”;
- “Not attempting in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear”; and
- failing, when it denies a claim or offers a compromise settlement, “to promptly provide a reasonable and accurate explanation of the basis for such actions.”
Under the model law these count as violations when committed “flagrantly and in conscious disregard” of the law or so often that they indicate a general business practice. It’s enforced by state insurance regulators and says it doesn’t create a private right to sue. Your state’s version may differ, and its insurance department handles complaints.
What slows a demand down
- Missing records or bills. The adjuster can’t evaluate damages it can’t see.
- Disputed fault. The insurer may investigate, interview witnesses or wait for a police report.
- Questions about treatment. Gaps in care or treatment the insurer considers unrelated often lead to more requests.
- Ongoing treatment. If you’re still treating, the claim may not be ready to value.
- The policy limit. If damages approach the at-fault driver’s coverage, the insurer may handle the claim differently.
Questions to ask your lawyer after the demand goes out
- On what date was the demand sent, and has the insurer acknowledged it?
- What has the adjuster asked for, and has it been sent?
- Is fault or any of my treatment disputed?
- What is the latest offer, and what would I take home from it?
- When is the deadline to file a lawsuit in my case?
Frequently asked questions
How long after a demand letter can I expect a settlement?
There’s no fixed time. It depends on how quickly the insurer acknowledges and reviews the demand, whether it disputes fault or treatment, and how many rounds of offers it takes. Ask your lawyer which step you’re on and what the insurer is waiting for.
What happens if the insurance company ignores my demand letter?
Your lawyer follows up in writing. Insurance regulators treat some claim-handling failures — such as not acknowledging communications with reasonable promptness — as unfair claims practices when they’re done knowingly or as a general business practice. Your state’s insurance department accepts complaints about insurers.
Do I have to accept the first offer after a demand letter?
No. The decision to settle is yours. Before you reject or counter, compare what you’d take home now with what a later settlement would need to be after fees and costs.
Will my lawyer tell me about the insurer’s offer?
They should. The ABA’s commentary on Model Rule 1.4 says a lawyer who receives a settlement offer must promptly inform the client of its substance, unless the client has already said how to respond.
Can I sue an insurer for taking too long?
Not under the NAIC model unfair claims law itself, which says it doesn’t create a private cause of action — it’s enforced by state regulators. Some states have their own laws or court decisions on insurer bad faith; ask a lawyer in your state.
Reviewed by
Morgan Hale, Editor. Writes about the financial side of injury claims — fees, liens, timelines and state rules — and checks every page against its sources before it’s published. Not a lawyer; “Morgan Hale” is a pen name. Editorial policy · How we calculate
Sources
- NAIC Unfair Claims Settlement Practices Act (Model 900), Sections 1, 3 and 4 (National Association of Insurance Commissioners)
- ABA Model Rule 1.4, Comment [2] — lawyers must promptly tell clients about settlement offers (American Bar Association)
- ABA Model Rule 1.2(a) — The client decides whether to settle (American Bar Association)
- Counteroffer (Wex legal dictionary) (Cornell Legal Information Institute)
Not legal or financial advice. InjuryMath is not a law firm and does not sell or broker funding. This page gives general information based on the sources listed; your contracts and your state’s law control. For advice about your situation, talk to a licensed attorney in your state.