Responding to a claim

Sample: Sample response to letter of demand - Car accidents

A letter of demand is a letter fro​m the other party asking for money to be paid. It often warns you that if this is not done they may start a court case to recover the money you owe them.

If you were in a car accident and the other driver believes it was your fault, they (or the owner of the car or their insurer) may send you a letter of demand. This might be the first time you find out that someone is claiming money from you. 

A letter of demand will usually state: 

• ​how much the other party is claiming
• why the other party believes you were at-fault in the car accident
• what the other party will do if you don't pay them by a certain date. ​

You may receive the letter by registered post or email. The demand can also be made over the phone or in person. If the other party is insured, the letter of demand may be sent by their insurance company.

You can write a response to the letter of demand, explaining that you admit or deny their claim, offering to pay a different amount, or offering to pay the amount in instalments.

When the other party receives your response, they will decide whether to accept your offer, put a counteroffer or take the case to court. 

If you and the other party reach an agreement, you should record your agreement in writing.

For more information, see Put it in writing, in Settling your dispute.

If you need help working out what payments you can afford, you may want to contact a financial counsellor. To find a free financial counsellor, see Financial Counsellor Search Tool on the Financial Rights Legal Centre ​website. 

Without prejudice

Be careful about what you write in your response to a letter of demand, as it could be used against you later if the case goes to court. Unless you want to admit fault, you should write "without prejudice" on your response. This means the response can't be used by the other party as evidence in Court. You can speak openly about the matter without the risk of the other party using that information against you later. If you are not sure how to respond to a letter of demand, you should get legal advice.​

You may agree that you were at fault in the accident and that the amount of money they are claiming is reasonable.

Before you agree that you were at fault in the accident, you should contact your insurer and get legal advice. 

If you believe that you were not at fault in the car accident, you should tell the other party why you deny their claim. 

You can do this by speaking or writing to them. It is a good idea to always be polite and courteous when communicating to the other party.

If you believe you were both partly at-fault, you can negotiate to pay them a reduced amount and also make a claim against them if your car was damaged in the accident. This is called 'contributory negligence'. You should get legal advice​ about this as it can be complex.

If the other party does not agree with you, they may decide to start a court case against you. 

If the other party has already started a court case against you, see Going to court.

Sample: Sample Request for more information - Car accidents

If you don't know whether you were at fault or not, or how they calculated the money they are claiming, you can write back to them to ask for more information. This is known as a 'request for further and better particulars'. 

In your letter you should be careful not to admit or deny the claim. You should ask the other party for information and documents that will help you decide whether to admit the claim, such as: 

• ​​​invoices, bills and quotes for the repairs needed to their vehicle
• the police report, if there is one
• invoices or receipts in relation to their other losses, such as car hire costs
• details about how accident the happened and why the other party thinks you were at fault. 

You can contact the other party at any time to try to reach an agreement about the claim.

You can offer to pay a lesser sum or an amount in instalments until the claim is paid. 

Negotiating with the other party doesn't need to be formal. You can negotiate with the other party in person, on the phone, or by writing a letter, email or text. 

You should not admit fault and write “without prejudice” on the letter, text or email. This means it can’t be used by the other party as evidence in court. You can speak openly about the matter without the risk of the other party using that information against you later. 

If you negotiate verbally, keep notes of any conversations you have with the other party, including dates and times. These may be helpful if you end up going to court. 

If you come to an agreement, it is a good idea to put your agreement in writing.

If you can't reach an agreement with the other party, the other party may decide to start a case in court against you. It is a good idea to try and resolve your dispute with the other party, before going to court.

For more information, see Settling your dispute.

If someone makes a claim against you because they believe you were at-fault in a car accident and you have either third party property or comprehensive car insurance, you will need to decide whether to make a claim on your insurance policy. If you decide to make a claim, your insurance company will handle the claim for you. 

If you have comprehensive insurance, your insurer should also cover the cost of repairing the damage to your vehicle and other losses.

Before you decide whether to make a claim on your insurance policy, you should consider whether making the claim will reduce your 'no claim bonus', increase the cost of your premiums or affect your ability to obtain insurance in the future. You may also have to pay an excess.

For more interactive assistance, see the Motor Vehicle Accident Problem Solver on the Financial Rights Legal Centre website. 

If you are the 'at-fault' driver and are charged by the police for being under the influence of drugs or alcohol at the time of the accident, your insurance company may refuse your claim. ​

If you decide to make a claim on your insurance policy, you should contact your insurer for details on how to make a claim and what other information they need.

For more information, see Insurance.

It may be a condition of your policy to tell your insurance company if you have been involved in a car accident, even if you decide not to make a claim.  

You should not admit to the other driver that you were at fault in the accident if you intend to make a claim on your insurance policy.