Demand Letter Question?

Question

What happens when an attorney sends a demand letter to the insurance company threatening to sue for a denied claim (car theft)? Does it usually get ignored or does it get the insurance to finally do something? Please let me know! Thanks!

Answer 1

You must have the toughest stolen car claim out there.

So do we assume that the claim from your previous questions was denied? Or is the attorney sending a letter to the company asking them to make a decision one way or the other?

If they denied the claim then I assume the company sent you a formal written denial that you have given to your lawyer.

The company has a duty under the Fair Claim Practices Act to respond to ANY correspondence it receives from it's policyholder or their legal representative. So the letter will not get ignored.

In my experience as a manager a complaint from the Insurance Commissioners office gets things moving quicker than a lawyer's letter and certainly faster than a lawsuit.    

Again, good luck

- EDIT -

I have no clue what kind of car or type of keys it had, but I have heard of other adjusters talk about theft claims where they suspected employees at dealerships were making/ordering dup keys for cars that were recently serviced in their shop. Then they would go out and steal the cars or stereos out of them. So since all the your keys were accounted for doesn't mean the car couldn't have been stolen.  

BTW, if I had an expert tell me on one of my files that they "believed" the car couldn't be stolen I would be very hesitant to deny the claim without an Examination Under Oath first. Even though it is your legal duty to prove your claim, as an adjuster I wouldn't want to go to court with an expert using stating they "believed"  the car couldn't have been stolen.

Answer 2

Insurance companies and adjusters are certainly not intimidated by attorneys.  Your file will be reopened, and the reason for the denial will be outlined to your attorney.  They will not just ignore the letter.  He can go ahead and sue, but that does not mean the adjuster will offer to settle if in fact the denial was appropriate.   Adjusters are more than willing to complete the litigation process especially if the claim was denied because of potential fraud.(not sure why yours was however).