Car Accident Demand Letter Response: What to Expect and How to Handle It
After a car accident in California, there’s a point in the settlement process where you (or your lawyer) send the insurance company a demand letter. That letter lays out what happened, what it cost you, and how much you want them to pay. Medical bills, lost wages, pain and suffering, all of it, wrapped up in a specific dollar amount.
The demand letter response is what the insurance company sends back. It usually comes from the at-fault driver’s insurance adjuster, and it typically arrives within 30 to 60 days of receiving your demand. That response will do one of four things: accept your demand in full, deny it entirely, come back with a counteroffer (almost always lower than what you asked), or ask for more documentation before deciding.
Most people get a counteroffer. And most counteroffers are insultingly low.
That’s by design. The insurance company’s first response is a negotiation tactic, not a final answer. And understanding that distinction is what separates people who settle for pennies from people who get paid fairly.
Key Takeaways
Key Takeaways
Priority
Insurance companies almost always start with their lowest possible offer. The first number you see is what they’re hoping you’ll accept before you learn what your case is actually worth.
→ Never accept the first offer without legal review
California law gives insurers 40 days to accept or deny your claim after receiving proof of claim. If they blow past that deadline, they may be violating state regulations — and that gives you ammunition.
Hiring an attorney increases the average payout by 3.5 times, even after fees, according to Insurance Research Council data. For cases over $25,000, the math almost always favors getting representation.
You have two years from the date of your accident to file a lawsuit in California. You have time to negotiate — don’t let the insurer’s pressure tactics rush you into a bad deal.
→ Urgency is their strategy, not your reality
What If They Accepted Your Full Demand?
This is rare. If it happens, read the release form carefully before you sign anything. That release means you’re giving up your right to come back for more money. Ever. Even if your injuries get worse. Even if you need surgery six months from now.
If they accepted fast and without pushback, you probably asked for too little. Pain and suffering, future treatment costs, loss of enjoyment of life. These all have real dollar values that most people forget to include. A quick acceptance should make you pause, not celebrate.
How Do You Handle a Full Denial?
Don’t panic. A denial is a negotiation tactic just as often as it’s a genuine coverage decision. Adjusters deny claims to see if you’ll fold. Many people do. They see “denied” and think the fight is over.
It’s not.
Figure out what they’re actually denying. A liability denial means they’re claiming their driver wasn’t at fault (or that you were). A damages denial means they’re agreeing the accident happened but disputing your injuries or how bad they are.
If they’re denying liability, go back to your evidence. Police report, witness statements, photos, camera footage. California follows pure comparative negligence, which means even if you were partially at fault, you can still recover damages. Your payout just gets reduced by your percentage of fault. Their argument that you were “50% at fault” doesn’t kill your case. It cuts it in half.
If they’re denying damages, they might demand an “Independent Medical Examination.” That word “independent” is generous, because the doctor is chosen and paid by the insurance company. Under California Code of Civil Procedure §2032.220, these exams can’t include painful or intrusive procedures, must happen within 75 miles of your home, and you have a right to have your attorney present.
After any denial, your move is a detailed rebuttal letter addressing every reason they gave. Attach evidence they missed. Make it clear you’re not going away.
How Do You Counter a Lowball Settlement Offer?
This is where most people land. You asked for $40,000. They offered $8,000. Your blood pressure just spiked. Understandable.
Here’s what’s actually going on. The adjuster has an internal “reserve” on your file, their real estimate of what your claim is worth. That number is almost always higher than their first offer. Their job is to close your claim for as little as possible. Your job is to push them toward that real number.
How adjusters calculate that lowball number
They take your medical bills and lost wages, then apply a multiplier. For soft tissue injuries (whiplash, sprains), they usually multiply by 1.5 to 3. For serious injuries (broken bones, herniated discs, surgery), the multiplier runs 3 to 5 times your economic damages. The catch? They’re always applying the lowest multiplier they can justify.
So say you have $10,000 in medical bills and $5,000 in lost wages. A fair range for a moderate soft tissue case could be $22,500 to $45,000. If they offered $8,000, they’re not even at 1x. That’s not a negotiation. That’s an insult.
How to write your counteroffer
Your counter-demand should include three things:
- An itemized breakdown of every dollar. Medical bills, lost wages, out-of-pocket costs, future treatment estimates, and pain and suffering. Put a number on everything.
- A specific counter-amount with math to back it up. Don’t just say “I want more.” Say “Based on $15,000 in economic damages and a 3x multiplier reflecting my herniated disc diagnosis, my counter-demand is $45,000.”
- A response deadline of 14 to 21 days. This creates urgency and signals you’re serious. Without a deadline, they’ll sit on it for months.
And look, not every first offer is a lowball. If you had a minor fender-bender with minimal treatment and they’re offering something reasonable relative to your bills, it might make sense to take it. The real question: does this number cover everything you’ve been through, and everything you’ll need going forward?
What If They’re Asking for More Documentation?
Sometimes legit. Sometimes a stall.
If they want medical records directly related to your accident injuries, fine. They need to verify treatment and costs. If they’re asking for your complete medical history going back a decade, that’s a fishing expedition. They’re hunting for a pre-existing condition to blame your pain on or a gap in treatment to argue your injuries “aren’t that bad.”
California’s regulations require insurers to respond to your communications within 15 days. They can’t sit on your paperwork for months, then claim they need more time. If they keep requesting documents while your statute of limitations ticks down, that pattern of delay is actually evidence of bad faith. Keep records of everything you send and when.
When Should You Hire a Personal Injury Lawyer?
Four things explain most of the male-female fatality gap. All of them are choices.
You can handle some claims yourself. A simple fender-bender with clear fault, minor injuries, and a cooperative insurer might not need an attorney. But there are clear signals that DIY negotiation has hit its limit.
The $25,000 threshold. Insurance Research Council data shows that represented claimants receive settlements 3.5 times higher on average, even after attorney fees. One study found that represented claimants averaged $77,600 versus $17,600 for those who went solo. Contingency fees typically run 33% (or 40% if it goes to trial), so for larger claims, the math strongly favors getting help.
Red flags you need a lawyer now:
- The insurer denied your claim and won’t explain why
- They want an Independent Medical Examination
- You got a “reservation of rights” letter, meaning the insurer may deny coverage later
- Your injuries required surgery or ongoing treatment
- The adjuster stopped returning your calls
- Your statute of limitations is approaching with no resolution
An attorney can subpoena records, depose witnesses, hire experts, and file a lawsuit that forces the insurer to negotiate seriously. Most work on contingency. You pay nothing unless they win.
What California Laws Give You an Edge?
The 40-day deadline
Under California Code of Regulations §2695.7(b), insurers must accept or deny your claim within 40 calendar days of receiving proof. Not business days. Calendar days. Mentioning this deadline in your correspondence tends to speed things up fast.
Bad faith has real consequences
California’s regulations specifically prohibit insurers from making settlement offers that are “unreasonably low.” If their behavior is found to be fraudulent, oppressive, or malicious, you may be entitled to emotional distress damages and punitive damages on top of your original claim amount.
Small claims court pressure
For claims under $12,500, California small claims court costs $30 to $100 to file, gives you a trial date in one to two months, and attorneys can’t represent either side. Just filing often gets the phone ringing with a better offer.
That demand letter response sitting on your kitchen table isn’t a final answer. It’s the start of a negotiation, and now you know how the other side plays it.
If any of the red flags above are showing up in your case, or if the numbers just feel wrong, DK Law offers free case evaluations for California accident victims. No pressure, no commitment. Just a straight answer about what your case is worth and whether you’re getting a fair deal. Contact us to talk about your case.
Prior results do not guarantee a similar outcome. This article provides general legal information and should not be taken as legal advice for your specific situation.
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