Debt Collection Process

If a person receive a demand letter, do they have to notify their insurance company?

my lawyers have sent 2 demand letters so far. And it been almost 2 months since the last one was sent...How come neither the person or their insurance company contact my lawyer. I dont think the person had notify his insurance company yet. But why wouldnt he everyone know and even the insurance company tells you if you are being sued you have to fax them the papers as soon as possible. I dont get why he havent yet or do you think the insurance company know but they just arent responding

Public Comments

1. You are not required to notify your insruance company when you get a claim letter, though you should. If your insurance compnay is not notified of a claim in a timely fashion, the company may be able to use that lack of notice to excuse it from having to pay on the claim. As the person making the claim, you generally want the insurance company to be notified so liquid funds will be available to pay if you are successful in the claim
2. There are certain principles that are constant in preparing for a possible litigation. Among these are, never appear too anxious to settle if you are served with such a letter, and also, always lowball on the initial settlement offer. Its a strategic ploy, true, but its something thats done all the time. A game of chicken, if you will. What some defendants rely on is that the plaintiff will begin to tire of the time and exoense that goes into this process and want to settle, usually on better terms than they could get otherwise. Im sure that the carrier and the counsel for the adverse party know all about the claim, theyre just following the strategy described above.
3. Actually, the person who received the demand letter is probably required to notify his insurance carrier under his insurance policy's terms. Your attorney can do some quick discovery and and question the person who got the demand letters. Your lawyer can send a copy to the insurance company if the recepient didn't. If the insurance company is not aware of the demand, your lawyer should get them a copy asap. He has the power to do that if he knows who the insurance carrier is. If he doesn't, he needs to get the other party into his office and find out.