What is a demand letter and a reservation of rights letter, and how do they relate to my personal injury lawsuit?

When you are in an accident and sustain an injury due to someone else’s negligence or fault, multiple things are set into motion.

The first and most important is that you begin the process of undergoing medical care for your injuries. This is the central concern, and as such, it is important that you have a personal injury attorney to handle the other aspects of your recovery, which includes your recovery of financial damages from the person responsible for the accident.

A personal injury lawsuit is the means by which a victim can recover a monetary equivalent of the medical, psychological, property, and secondary expenses directly caused by the accident. This includes all prior, present, and future medical expenses related to the injury; compensation for income lost as a result of the injury and required time off; psychological in-kind expenses such as therapy required for post-traumatic stress; and out-of-pocket expenses that are not included in medical expenses but are required to navigate life while recovering from the injury.

What is a demand letter?

When your personal injury attorney reviews your case and relevant documentation, they will determine an amount you are seeking in damages. This includes all of the above expenses you have sustained to date and an estimation of future expenses you will have to pay as a continued result of your injury. Once this amount is determined, your attorney will send a demand letter to the responsible party’s insurance provider.

This is generally the first communication that your personal injury attorney has with the company responsible for compensating you for your sustained injury. It lets the insurance provider know that their policy holder’s actions caused your injury and that they will be responsible for full compensation of damages caused. Usually, an attorney requests that compensation in the form of the responsible party’s insurance limit and includes a statement that expenses for injuries sustained are likely to exceed the insurance limit. Because it is not yet known what that limit is, the attorney usually leaves this open-ended and awaits a response from the insurance company to begin negotiation of compensation.

In order to supplement the request for the compensation, your personal injury attorney will include supporting documentation regarding the accident and your injury. Some such supporting documents include

• the police report from the accident, which includes testimonies from involved parties, photos and police video from the accident, and other important evidence providing context in determining fault;
• eyewitness statements from the accident, likely as part of the police report, which also helps determine fault;
• photographic evidence of your physical injuries, such as MRIs, X-rays, and doctor’s visit paperwork, which demonstrate beyond deniability the need for medical care;
• proof of medical expenses, such as medical bills, that provide figures supporting the request for compensation at or beyond the insurance limit and demonstrate the probable presence of future medical expenses; and
• proof and amount of lost income to date, all of which the insurance company will be responsible for compensating, in addition to future lost wages.

What is a reservation of rights letter?

While it may be intimidating to receive, a reservation of rights letter is a simple cog in the wheel of the personal injury lawsuit process. The reservation of rights letter is sent directly to the victim from the responsible party’s insurance company and notes that the provider is not denying or fighting your personal injury claim – yet – but that they may do so upon undergoing an internal investigation of the accident that caused your injury. It is important to educate yourself in the process in order to expect this letter, which generally is sent in response to your personal injury lawyer’s demand letter so that you do not react to the often cold letter with direct communication with the insurance company.

It is best to let your personal injury attorney handle all communication with the responsible party’s insurance provider. The insurance provider’s job is to pay out as little as possible, and as such, they will likely attempt to get you to say something that will help them deny full responsibility for the injury. If you reach out to the responsible party’s insurance company, or they call or contact you in any way, you are putting yourself at risk for not recovering all of the damages you deserve.

Contact a Mercer County Personal Injury Attorney Today

At Cohen & Riechelson, our team of experienced personal injury attorneys is committed to serving our clients in Trenton, Princeton, Hamilton, and the greater Mercer County area in all cases in which they have been injured in an accident due to the negligence of someone else.

To schedule a consultation with a skilled member of our firm regarding your personal injury case, please contact us online or through our Hamilton office at 609.528.2596.