The Letter Asking for Your Full Limit: Time-Limited Demands, Explained

If you cause a crash that injures someone, one of the most important documents in the whole claim may be a letter you never see unless your insurer forwards it: a demand to settle for your policy limit. Since 2023, California law sets rules for these letters, and they matter more to a minimum-limits driver than to anyone.

What a time-limited demand is

Code of Civil Procedure 999 defines it as an offer, made before a complaint or arbitration demand is filed, to settle a claim for personal injury, property damage, bodily injury or wrongful death within the insurer's limit of liability, which must be accepted within a specified time. The rules apply to auto liability claims, among others, for demands sent on or after January 1, 2023.

What the letter must contain

Under Code of Civil Procedure 999.1, the demand must be in writing, labeled as a time-limited demand or reference the statute, and include:

1. A response period of at least 30 days from transmission by email, fax or certified mail, or at least 33 days if sent by regular mail.
2. A clear and unequivocal offer to settle all claims within policy limits, including satisfaction of all liens.
3. An offer of a complete release from the claimant for the insurer's insureds from all present and future liability for the occurrence.
4. The date and location of the loss, and the claim number if known.
5. A description of all known injuries, and reasonable proof, such as medical records or bills, to support the claim.

Code of Civil Procedure 999.2 says it goes to the address the insurer has designated through the Department of Insurance, or to the claims representative handling the claim.

What the insurer can do

Code of Civil Procedure 999.3 lets the insurer accept by agreeing in writing to all the material terms. Asking for clarification, more information or an extension during the response period is not, by itself, a rejection. If the insurer does not accept, it must tell the claimant in writing, before the deadline, what it decided and why, and that notice is relevant in any later lawsuit claiming extracontractual damages, which the statute defines as any amount exceeding the total available limit of the insurer's applicable policies.

Why this matters most at 30/60/15

The release is the heart of it. An accepted demand settles that claimant's claim within your limit and releases you from all present and future liability to them for the occurrence. With a $30,000 per-person limit, that can be the difference between a closed claim and a balance above the limit that follows you.

Myth and fact

Myth: "If they demand my limit, the insurer has to pay it."
Fact: The insurer decides. If it declines, the law requires a written decision with its reasons before the deadline.

Myth: "One release covers everyone who was hurt."
Fact: The release the statute describes is from the claimant making the demand. Other injured people have their own claims against the same per-accident limit.

What you should do

• Forward any letter from a claimant or their lawyer to your insurer the day it arrives. The clock may already be running.
• Tell your insurer about any other policy that could apply, such as an umbrella or another auto policy.
• Answer your insurer's questions quickly and completely; it cannot evaluate a demand without your account.
• If the claim looks larger than your limits, consider talking to your own attorney. We are an insurance brokerage, not a law firm.

The calmer way to face this letter is with limits that fit your exposure. Compare higher limits against your current policy here.