How to write a policy-limits demand letter in California

A policy-limits demand offers to settle a claim for the full amount of the at-fault party's liability coverage. It is the right letter when liability is reasonably clear and the client's damages plainly exceed the coverage. It does two jobs at once: it asks for the money that is there, and it puts the carrier on notice that refusing a reasonable offer within limits may expose it to the whole judgment. California has recognized that exposure since Crisci v. Security Ins. Co. (1967) 66 Cal.2d 425.

A pre-suit demand with a deadline on an auto, homeowner or commercial premises policy is also a time-limited demand under Code of Civil Procedure sections 999 to 999.5, and has to meet that chapter's requirements. The CCP 999 guide has the checklist. This guide covers the letter itself. It is general information, not legal advice.

Before you draft: the three facts it rests on

A policy-limits demand is only as strong as three facts. Confirm each before anyone writes a word.

1. The limits. Get the bodily injury limits in writing from the carrier. For auto policies issued or renewed on or after January 1, 2025, California's minimum liability limits are $30,000 per person and $60,000 per accident for bodily injury (Vehicle Code 16056); older policies may still carry the earlier $15,000 and $30,000 minimums. Look for other coverage too: umbrella or excess policies, a second vehicle's policy, an employer's policy if the driver was working, and the client's own underinsured motorist coverage.
2. Liability. The police report, scene and vehicle photos, witness statements, and the carrier's liability acceptance if there is one.
3. Damages above the limits. The specials alone, or the specials together with a credible account of general damages and future care.

Check for other claimants as well. A per-accident limit is shared by everyone hurt in the crash, and a demand for the per-person limit when several people were injured should account for them.

The parts of the letter

Keep the offer in one short paragraph near the top, in plain words. The rest of the letter supports it; it shouldn't qualify it.

Building the damages section

Past medical expenses. Under Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, a plaintiff whose care was paid by insurance recovers no more than the amounts paid or still owed, not the higher billed amount a provider agreed to write down. Carriers apply that rule when they value a demand, so the specials figure should separate billed charges from amounts paid for insured care. Care provided on a lien, where the client still owes the full bill, is treated differently; note which providers treated on a lien. See Howell damages and specials.

Future care. Use the treating physician's recommendations in the records: a surgical consult, injections, ongoing therapy. A future-care figure with no recommendation behind it is easy to discount.

Lost earnings. An employer's wage verification, pay stubs or tax returns, and the dates off work tied to the records that took the client off work.

General damages. Concrete and specific: what the client did before the crash and can't do now, in the client's words and the records' words. See general damages.

Every number should trace to a page the carrier can find in the enclosures. The settlement calculator helps check whether the specials and the realistic range clear the limits.

Handling liens in the offer

Section 999.1(b) requires the offer to include the satisfaction of all liens. Before sending, list every lienholder you know of:

• Hospital liens noticed under Civil Code 3045.3.
• Medi-Cal, which must be notified within 30 days after a claim or action is filed (Welfare and Institutions Code 14124.73).
• Medicare conditional payments, which Medicare can recover from the entity that receives a settlement (42 U.S.C. 1395y(b)(2)).
• Health plan, ERISA plan and provider liens.

The usual approach is a statement that the client will satisfy all liens from the settlement proceeds. Carriers often ask for Medicare's status before paying, so start that process early. The lien reductions guide covers each type.

Delivering it and calendaring the deadline

• Send it to the insurer's designated address on the Department of Insurance list, or to the adjuster handling the claim (CCP 999.2(a)). Many firms send to both.
• Give at least 30 days from transmission by email, fax or certified mail, or 33 days by mail (CCP 999.1(a)). Give more when the records are long.
• Keep proof of transmission with the letter.
• Calendar the expiration and a reminder a week before.
• If the carrier asks for more information, answer in writing. A request for information or an extension is not by itself a rejection (CCP 999.3(b)). If the carrier declines, it must say so in writing, with its basis, before the demand expires (CCP 999.3(c)).

Why policy-limits demands fail

• The limits weren't confirmed, and the demand asked for the wrong number.
• The injuries described don't match the enclosed records, or a key record is missing.
• The specials total uses billed amounts the carrier will discount under Howell, with no explanation.
• A treatment gap or prior injury is left for the carrier to find. Address it in the letter.
• The release or the lien term is vague.
• The window was too short to review the records enclosed, and the carrier says so in writing.

Drafting a policy-limits demand in PlaintiffStack

PlaintiffStack's demand letter tool writes a policy-limits demand in the firm's voice from the case's own documents, on the firm's letterhead. Every fact cites the page it came from, so the attorney can check the injury list against the records in minutes. Facts the file doesn't contain are marked as fields to fill rather than guessed, and every change is a suggestion the reviewer accepts or dismisses.

The tool works from the treatment chronology and the missing records report, so gaps in the file show up before the letter does. Agents read searchable PDFs, Word and text files; scanned or faxed records aren't read yet, because there is no OCR. Each tool shows an estimated cost before it runs. After the demand goes out, a morning check flags offers and demands about to expire. See Draft and the personal injury page.