Policy-limits demand

What it is

A policy-limits demand asks the liability carrier to pay every dollar of its bodily injury coverage in exchange for a release of its insured. Firms send one when the damages clearly exceed the limits: serious injuries, surgery, large specials or a long course of treatment against a minimum or modest policy.

The California rule

California law gives the demand its force. Since Comunale v. Traders & General Insurance Co. (1958) and Crisci v. Security Insurance Co. (1967), an insurer that unreasonably refuses a reasonable offer to settle within limits can be liable for the whole judgment against its insured, including the part above the limits. When the demand carries a deadline and is made before suit, it is a time-limited demand and must meet Code of Civil Procedure 999.1: in writing, at least 30 days to accept (33 by regular mail), the loss details, an offer to settle all claims within limits including liens, a complete release, and reasonable proof such as records and bills.

California has no general statute that makes a liability insurer disclose its limits before suit, so firms ask for them or rely on what the client and the other driver can provide. Once a case is filed, Code of Civil Procedure 2017.210 makes the existence and limits of coverage discoverable.

Why it matters to a plaintiff firm

A limits demand is only as strong as its proof. The carrier will judge it against the medical chronology, the specials, the liens it must account for and the coverage you confirmed. Missing records weaken the reasonableness argument a later bad-faith case would rest on. See the policy-limits demand letter guide for structure and timing.