What Is a Demand Letter?
A demand letter in a personal injury case is a formal written communication from your attorney to the at-fault party’s insurance company, summarizing the facts of the accident, the injuries suffered, the damages incurred, and the amount required to settle the claim without filing a lawsuit. It is the first formal step toward settlement in most personal injury cases.
What a Strong New Mexico Demand Letter Includes
- Liability narrative: Clear statement of how the accident occurred and why the defendant was at fault, supported by the police report, witness accounts, and any physical evidence.
- Injury and treatment summary: All diagnoses, treating providers, procedures, and the current prognosis—including whether any permanent injury or disability exists.
- Medical specials: Complete itemized bill list with documentation.
- Lost wages documentation: Pay stubs, employer letter, and calculation of income lost during recovery.
- Pain and suffering narrative: A specific account of how the injury has changed daily life, activities, relationships, and emotional well-being.
- Demand figure: A specific dollar amount—typically higher than the expected settlement—to leave room for negotiation.
- Response deadline: Usually 30 days.
How It Affects Your Personal Injury Case
The demand letter is the opening of the negotiation. Its strength depends on completeness—a letter sent before treatment is complete undervalues the claim because future medical costs are unknown. New Mexico’s three-year statute of limitations (NMSA § 37-1-8) gives more time to prepare than most states, but waiting until maximum medical improvement is still the recommended approach unless the deadline is approaching.
Example Scenario
Nine months after a truck accident in Las Cruces, Diana completes treatment with a permanent 10% impairment rating from her orthopedist. Her attorney sends a demand letter: $52,000 in medicals, $14,000 in lost wages, $180,000 pain and suffering, for a total demand of $246,000. The insurer responds at $78,000. Negotiations begin from there.
Frequently Asked Questions
When is the best time to send a demand letter in New Mexico?
After reaching maximum medical improvement (MMI)—when your condition has stabilized and total damages can be accurately calculated. Sending before MMI means you’re negotiating before you know what future care will cost. Exception: if the three-year statute of limitations is approaching, send the letter and prepare to file suit at the same time.
Is the insurance company required to respond to my demand letter in New Mexico?
There is no law requiring a response to a demand letter. But New Mexico’s Unfair Insurance Practices Act (NMSA § 59A-16-20) requires insurers to act promptly and in good faith when liability is reasonably clear—failure to respond at all risks a bad faith claim in appropriate circumstances.
Have questions about demand letters or settlement strategy? Call El Gringo Law at (505) 207-5000 for a free case review.
