In the article “Tips on Creating an Effective Policy Limits Demand Letter,” published by Orange County Trial Lawyers Association’s The Gavel, partner Ronald J. Cook discusses one of the most useful, yet underutilized tool available to plaintiff attorneys: policy limit demand. Mr. Cook comments, “A timely and well executed policy limit demand can either settle a case for the most the client could ever practically realize, or can force an insurance company to pay the entire verdict even if that number exceeds the defendant’s policy limit because the insurer failed to settle the case within the policy limit when it had the chance.”
Mr. Cook provides a checklist which identifies issues, laws and practical considerations associated with making an effective policy limits demand, including convincing the carrier this is a liability case and damages will exceed policy limit, as well as many other helpful tips.
He highlights the case of Allen v. Allstate Insurance and Betts v. Allstate Insurance, proving that while a policy limit demand does not have to be “letter perfect,” you are better off if it is. A timely and well executed policy limit demand can either settle a case for the highest amount possible, or can force an insurance company to pay the entire verdict even if that number exceeds the defendant’s policy limit.