Time-limited demand

What it is

A time-limited demand is a written offer to settle an injury claim for an amount within the at-fault party's liability limits, open only until a stated deadline. It puts the carrier to a clear choice: pay within limits, or risk liability for a judgment above them if the refusal later proves unreasonable.

The California rule

Since January 1, 2023, Code of Civil Procedure sections 999 to 999.5 govern pre-litigation time-limited demands from represented claimants under auto, motor vehicle, homeowner and commercial premises liability policies. Under section 999.1 the demand must:

• Be in writing and labeled as a time-limited demand, or cite section 999.1
• Give at least 30 days to accept from transmission by email, fax or certified mail, or 33 days by regular mail
• State the date and location of the loss, the claim number if known, and a description of all known injuries
• Offer clearly to settle all claims within limits, including satisfaction of all liens, for a complete release of the insured
• Include reasonable proof, which may be medical records or bills, to support the claim

It goes to the address the insurer has designated for these demands, where one is posted with the Department of Insurance, or else to the adjuster handling the claim. A request for clarification, more information or an extension is not by itself a counteroffer or rejection (section 999.3). An insurer that declines must say so in writing, with its reasons, before the demand expires. Under section 999.4, a demand that doesn't substantially comply is not treated as a reasonable offer within limits in a later suit for extracontractual damages.

Why it matters to a plaintiff firm

A demand that misses an element can lose the pressure it was written to create. Firms keep a checklist of the 999.1 elements, log how and when the demand went out, and calendar the response date the same day. Our guide to CCP 999 demands walks through each element.