Policy-Limits Demand Checklist: A Practical Checklist

Summary. This checklist breaks a time-limited policy-limits demand into phases and concrete tasks for each participant: the claimant's lawyer, the liability insurer, defense counsel, and the insured. It starts with triage questions that decide whether a limits demand fits the case and which state's rules apply, then covers coverage confirmation, the evaluation package, liens, drafting to the governing statute, delivery, and the response period. The insurer's phases cover same-day logging, coverage review, notice to the insured, evaluation under the correct standard, information and extension requests, and acceptance, tender, or written rejection. Separate phases address defense counsel's duties, the insured's choices, multiple claimants and liens, and what to do after a demand expires. Red-flag boxes, a deadlines table, and a short section on common failure points with a worked example close the checklist.

A time-limited demand compresses a case into a few weeks. Everything that matters later in a bad-faith suit (what the insurer knew, when, what it asked, what it said to the insured, and whether the claimant gave it a real chance) happens inside that window. This checklist is built for that window.

How to use this checklist

Work through the phases that apply to your role. Claimant's counsel uses Phases 0 through 2 and 7 through 8. Insurers use Phases 0, 3, 4, 7, and 8. Defense counsel uses Phase 5, and insured businesses and individuals (and their personal lawyers) use Phase 6. Each item is a task, followed where useful by the governing authority and a short practical note. Statutory items are flagged by state; if your claim is governed by a state without a demand statute, treat the statutory items as good practice rather than requirements.

The doctrine is explained in Policy-Limits Demands and Insurer Bad Faith: How Time-Limited Demands Set Up Excess Verdicts, the narrative steps are in Making or Responding to a Time-Limited Policy-Limits Demand: A Practical Guide, and the letters referred to below are in the Policy-Limits Demand Toolkit: Demand Letters, Insurer Responses, and Excess Exposure Letters.

State demand statutes have been amended repeatedly. Before relying on any statutory item, confirm the current text in force for the date of loss or demand.

Phase 0: Triage (all participants)

Identify the governing state law. The duty to settle is state law; in federal court, the forum's choice-of-law rules apply (Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487 (1941); Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938)). Note: the accident state, the policy state, and the insured's domicile may differ.
Identify the standard that will be applied. Texas: ordinarily prudent insurer (American Physicians Insurance Exchange v. Garcia, 876 S.W.2d 842 (Tex. 1994)). California: prudent insurer without limits (Crisci v. Security Insurance Co., 66 Cal. 2d 425 (1967)). Florida: totality of the circumstances (Berges v. Infinity Insurance Co., 896 So. 2d 665 (Fla. 2004); Harvey v. GEICO General Insurance Co., 259 So. 3d 1 (Fla. 2018)). Georgia: equal consideration in response to a valid offer (Southern General Insurance Co. v. Holt, 262 Ga. 267 (1992); First Acceptance Insurance Co. of Georgia v. Hughes, 305 Ga. 489 (2019)). New York: gross disregard (Pavia v. State Farm Mutual Automobile Insurance Co., 82 N.Y.2d 445 (1993)).
Determine whether a demand statute applies. California (Cal. Civ. Proc. Code §§ 999-999.5) for pre-complaint demands on auto, motor vehicle, homeowner, and commercial premises liability policies by represented claimants (Cal. Civ. Proc. Code § 999.5; Cal. Civ. Proc. Code § 999.4). Georgia (O.C.G.A. § 9-11-67.1). Missouri (Mo. Rev. Stat. § 537.058). Florida's Fla. Stat. § 624.155 as amended in 2023 regulates bad-faith liability and creates a 90-day safe harbor.
Confirm whether liability is reasonably clear. Note: disputed liability is the most common legitimate reason for an insurer to decline.
Confirm whether damages plainly exceed the limits. If not, a limits demand is a negotiating position, not an excess setup.
Identify all potential claimants from the occurrence. Multiple claimants change everything (Phase 7).
Identify all potential insureds. Driver, owner, employer, additional insureds.

Phase 1: Claimant's counsel, before the demand

Request limits for every policy in writing. Primary, umbrella, excess, employer, owner. Florida: written request triggers a 30-day disclosure duty under Fla. Stat. § 627.4137. Georgia: O.C.G.A. § 33-3-28. In federal suits, use Fed. R. Civ. P. 26(a)(1)(A)(iv) disclosures.
Obtain declarations pages, not just a stated number. Note: confirm per-person versus per-accident limits and any self-insured retention.
Confirm the client's goals and authority in writing. The client decides whether to settle (ABA Model Rule 1.2(a)). Explain that the insurer may simply accept.
Collect complete medical records and itemized bills. Not summaries. California requires "reasonable proof" (Cal. Civ. Proc. Code § 999.1).
Collect liability evidence. Crash report, photographs, witness statements, admissions, citations.
Obtain permanency and future-care opinions where the claim depends on them. Note: demands sent before treatment stabilizes are the ones courts treat as premature (Pavia v. State Farm Mutual Automobile Insurance Co., 82 N.Y.2d 445 (1993)).
Identify every lien and payer. Medicare (traditional and Advantage), Medicaid, ERISA plans, hospital liens, workers' compensation, letters of protection.
Request Medicare conditional payment information early. Medicare can recover from a liability insurer that has already paid (42 U.S.C. § 1395y(b); 42 C.F.R. part 411).
Assess Medicaid and ERISA reimbursement scope. Arkansas Department of Health & Human Services v. Ahlborn, 547 U.S. 268 (2006); Gallardo v. Marstiller, 596 U.S. 420 (2022); Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356 (2006); US Airways, Inc. v. McCutchen, 569 U.S. 88 (2013).
Calendar the statute of limitations against the planned response window. Note: do not let a demand window run past the limitations date.
Decide pre-suit or post-suit. California's statute covers only demands made before a complaint or arbitration demand (Cal. Civ. Proc. Code § 999).
If multiple clients, plan for aggregate settlement consent. ABA Model Rule 1.8(g).

Phase 2: Claimant's counsel, drafting and sending

Label the demand. California: "time-limited demand" or reference to § 999.1 (Cal. Civ. Proc. Code § 999.1).
State a clear, unequivocal offer within limits. Name the amount and the policy. Demands above limits do not trigger the duty (American Physicians Insurance Exchange v. Garcia, 876 S.W.2d 842 (Tex. 1994)).
Release all insureds fully. Texas Farmers Insurance Co. v. Soriano, 881 S.W.2d 312 (Tex. 1994) requires an offer to release the insured fully; California requires a "complete release" from "all present and future liability for the occurrence" (Cal. Civ. Proc. Code § 999.1).
Include all derivative claimants you represent. Spouse, children, estate.
Address liens expressly. California: offer must include "the satisfaction of all liens" (Cal. Civ. Proc. Code § 999.1). State that liens will be satisfied from the proceeds and offer indemnity.
Include the date and location of loss, claim number, and description of all known injuries. Required in California (Cal. Civ. Proc. Code § 999.1).
Attach an index of enclosures.
Set the acceptance period at or above the statutory minimum. California: 30 days from transmission by email, fax, or certified mail; 33 days by regular mail (Cal. Civ. Proc. Code § 999.1). Georgia: not less than 30 days from receipt (O.C.G.A. § 9-11-67.1). Missouri: not less than 90 days from the insurer's receipt (Mo. Rev. Stat. § 537.058).
State the deadline as a date and time with a time zone.
State how acceptance must be made. Written acceptance; to whom; by what method.
State payment terms that are achievable. Amount, payee, method, and a reasonable period after acceptance. Note: Georgia's 2013 statute allowed payment conditions (Grange Mutual Casualty Co. v. Woodard, 300 Ga. 848 (2017)); since the 2024 amendments, the payment date is a material term that must be at least 40 days after receipt, and any term outside the statutory list is immaterial (O.C.G.A. § 9-11-67.1(b)-(c)). Missouri: no payment deadline shorter than 10 days after the insurer receives the executed release (Mo. Rev. Stat. § 537.058).
Remove conditions that serve no client interest. Note: conditions are the most frequent source of later disputes over whether the demand was a real opportunity.
Enclose a proposed release.
Deliver to the correct address. California: the insurer's address designated with the Department of Insurance, or the assigned representative if known (Cal. Civ. Proc. Code § 999.2). Georgia: certified mail or statutory overnight delivery, return receipt requested, referencing O.C.G.A. § 9-11-67.1 and stating where acceptance may be sent. Missouri: certified mail, return receipt requested, to the liability insurer, referencing Mo. Rev. Stat. § 537.058.
Send by at least two methods and keep proof of delivery.
Copy defense counsel or the insured's personal counsel if known.
Calendar the deadline and interim follow-up dates.
Answer specific insurer questions promptly and in writing. Florida's 2023 amendments impose a duty of good faith on claimants and their representatives in furnishing information and setting deadlines, and a failure can reduce damages in a later bad-faith case (Fla. Stat. § 624.155(5)(b)).
Evaluate extension requests on their merits. California: a request for clarification, information, or an extension is not a counteroffer (Cal. Civ. Proc. Code § 999.3).
If accepted, perform exactly. Deliver the signed release and lien documentation as agreed.
If expired, confirm expiration in writing and advise the client.

Red flags for claimant's counsel

The deadline is shorter than the statutory floor, or shorter than the time a careful adjuster would need to read the records.

The release omits a co-insured or a consortium claim.

The demand conditions acceptance on acts of third parties the insurer does not control.

Medicare or another lienholder is known but unmentioned.

The demand is going to a general inbox rather than a designated address or assigned adjuster.

You would advise the client to reject the insurer's acceptance. (Then do not make the demand.)

Phase 3: Insurer, day of receipt through day 3

Log the date, time, and method of receipt.
Calculate the deadline independently. California counts from transmission (30 days, or 33 if mailed); Georgia from receipt.
Set an internal deadline at least five business days before the real one.
Route to an adjuster and to a manager with full-limit authority. Note: in Pavia v. State Farm Mutual Automobile Insurance Co., 82 N.Y.2d 445 (1993), the claims committee did not meet for months; most states would send that delay to a jury.
Acknowledge receipt in writing. Confirm the deadline. Do not reject or counteroffer in the acknowledgment.
Confirm all policies and limits that apply. Check for umbrella and excess policies and other insurers.
Open a coverage review if there is any question. Coverage is part of the Stowers trigger (American Physicians Insurance Exchange v. Garcia, 876 S.W.2d 842 (Tex. 1994)).
Send the insured an excess exposure letter with a copy of the demand. Florida duties include warning of excess exposure and advising of steps to avoid it (Boston Old Colony Insurance Co. v. Gutierrez, 386 So. 2d 783 (Fla. 1980)).
Tell the insured of the right to personal counsel.
Relay any requests from the claimant to the insured (statements, asset information, other insurance). Note: in Harvey v. GEICO General Insurance Co., 259 So. 3d 1 (Fla. 2018), failure to relay such a request was central to a reinstated bad-faith verdict.
Notify defense counsel, if assigned, and request a written evaluation.

Phase 4: Insurer, evaluation and response

Evaluate liability with the record in hand.
Evaluate damages, including future care, wage loss, and noneconomic damages, against local verdict experience.
Apply the jurisdiction's standard and record the analysis. California: would a prudent insurer without limits accept? (Crisci v. Security Insurance Co., 66 Cal. 2d 425 (1967)). A bad-faith finding still requires unreasonable conduct (Pinto v. Farmers Insurance Exchange, 61 Cal. App. 5th 676 (2021)).
Identify any genuinely missing information.
Request missing information specifically and in writing, early. Note: in Southern General Insurance Co. v. Holt, 262 Ga. 267 (1992), the insurer "did not seek more time to evaluate the claim or respond to the offer before it expired."
Request a specific extension if needed, stating that it is not a rejection or counteroffer. California: Cal. Civ. Proc. Code § 999.3. Georgia: requests for reasonable clarification are not counteroffers (Grange Mutual Casualty Co. v. Woodard, 300 Ga. 848 (2017) describes the provision).
Continue working the claim while waiting for answers.
Decide coverage, or reserve rights in writing while continuing to evaluate. An insurer that wrongly denies coverage and refuses settlement risks the whole judgment (Comunale v. Traders & General Insurance Co., 50 Cal. 2d 654 (1958)). In California, a disqualifying conflict may require independent counsel (Cal. Civ. Code § 2860).
Decide: accept, tender with reasonable conditions, or reject.
If accepting, accept the material terms in their entirety, in writing, before the deadline. Cal. Civ. Proc. Code § 999.3.
Match every condition of acceptance exactly. Payee, amount, method, payment deadline, affidavits. Note: Grange Mutual Casualty Co. v. Woodard, 300 Ga. 848 (2017) (late payment under a payment condition defeated settlement).
If the demand also seeks other insurers' limits, tender your own and communicate. Cotton States Mutual Insurance Co. v. Brightman, 276 Ga. 683 (2003).
If the demand requires court approval, treat it as valid. Berges v. Infinity Insurance Co., 896 So. 2d 665 (Fla. 2004).
If tendering with conditions, limit them to a full release, lien protection, and similar reasonable terms, and explain each.
Florida: consider the 90-day safe harbor for tendering the lesser of limits or the amount demanded after notice with sufficient evidence. Fla. Stat. § 624.155(4), for bad-faith actions, statutory or common law, filed after March 24, 2023.
If rejecting, explain the basis in writing before expiration. Required in California, and "relevant" in any later bad-faith case (Cal. Civ. Proc. Code § 999.3).
Issue payment on time and confirm receipt.
Preserve the entire claims file.

Red flags for insurers

The demand has been in the building for more than two business days without a calendar entry.

Liability is clear, injuries are catastrophic, and the planned response is a counteroffer below limits.

The response letter asks for records already in the file.

The insured has not been told about the demand.

The claimant asked for the insured's statement or asset information and no one has relayed it.

Your acceptance letter contains the words "subject to."

In California, there is no written explanation of a rejection on file before the deadline.

Phase 5: Defense counsel

Confirm in writing who your client is. Texas: the insured, not the insurer (American Physicians Insurance Exchange v. Garcia, 876 S.W.2d 842 (Tex. 1994)).
Send the insured the demand and an explanation of the excess exposure promptly.
Advise the insured of the right to personal counsel.
Give the insurer a candid written evaluation and recommendation. Note: assume it will be discovered in any bad-faith case.
If the insured wants the claim settled within limits, communicate that to the insurer in writing.
Identify and address conflicts. ABA Model Rules 1.7 and 1.8(f); ABA Formal Opinion 96-403 (insured objecting to or urging settlement within limits).
Do not advise the insurer on coverage against the insured.
If a reservation of rights creates a conflict, raise independent counsel. Cal. Civ. Code § 2860; San Diego Navy Federal Credit Union v. Cumis Insurance Society, Inc., 162 Cal. App. 3d 358 (1984).

Phase 6: The insured and personal counsel

Read the excess letter and the demand.
Retain personal counsel if assets exceed or may exceed the limits.
Write to the insurer urging acceptance within limits and stating that the insurer will be held responsible for any excess.
Cooperate with requests for statements, asset information, and other-insurance information.
Disclose all other potentially applicable insurance.
Decide whether to contribute personal funds to an above-limits offer. Texas: an insured who contributes may have a contract indemnity claim but no Stowers claim absent an excess judgment (In re Farmers Texas County Mutual Insurance Co., 621 S.W.3d 261 (Tex. 2021)).
Do not settle directly with the claimant without advice on the cooperation clause and consent judgment rules. California will not bind a defending insurer to a stipulated judgment (Hamilton v. Maryland Casualty Co., 27 Cal. 4th 718 (2002)); Texas invalidates certain pre-trial assignments (State Farm Fire & Casualty Co. v. Gandy, 925 S.W.2d 696 (Tex. 1996); Great American Insurance Co. v. Hamel, 525 S.W.3d 655 (Tex. 2017)).
Keep copies of everything the insurer sends.

Phase 7: Multiple claimants and liens (all participants)

Insurer: identify all claimants and their counsel early.
Insurer: propose a global settlement conference promptly. First Acceptance Insurance Co. of Georgia v. Hughes, 305 Ga. 489 (2019) (insurer's early efforts toward a global settlement).
Insurer: consider settling reasonably with one claimant where appropriate. Texas permits a reasonable settlement that diminishes limits available to others (Texas Farmers Insurance Co. v. Soriano, 881 S.W.2d 312 (Tex. 1994)).
Insurer: consider interpleader. 28 U.S.C. § 1335; 28 U.S.C. § 2361; Fed. R. Civ. P. 22. Note: interpleader divides the fund but does not control tort suits against the insured (State Farm Fire & Casualty Co. v. Tashire, 386 U.S. 523 (1967)).
Florida: consider the statutory interpleader or arbitration safe harbor for multiple claimants. Fla. Stat. § 624.155(6): file an interpleader, or make the limits available in agreed binding arbitration, within 90 days after notice of competing claims exceeding the limits.
Claimant's counsel with multiple clients: obtain written aggregate settlement consent. Model Rule 1.8(g).
All: resolve the Medicare conditional payment amount before disbursement. 42 U.S.C. § 1395y(b); 42 C.F.R. part 411.
All: document lien satisfaction mechanics (two-party checks, holdbacks, indemnities).

Phase 8: After the deadline

Claimant: confirm expiration and file or prosecute suit.
Insurer: consider whether a late tender is still worth making and document it. Note: late tenders have mixed effect (Pavia v. State Farm Mutual Automobile Insurance Co., 82 N.Y.2d 445 (1993); Southern General Insurance Co. v. Holt, 262 Ga. 267 (1992)).
Florida: consider the civil remedy notice process and cure period. A tender after a civil remedy notice does not bar a common law third-party claim (Macola v. Government Employees Insurance Co., 953 So. 2d 451 (Fla. 2006)).
After an excess verdict, insured and personal counsel evaluate assignment for a covenant not to execute. Southern General Insurance Co. v. Holt, 262 Ga. 267 (1992) (insured who assigned forfeited own recovery on the assigned claim).
Where the insurer refused to defend or reserved rights, evaluate state-specific consent judgment devices. Coblentz v. American Surety Co. of New York, 416 F.2d 1059 (5th Cir. 1969); United Services Automobile Ass'n v. Morris, 154 Ariz. 113 (1987); Miller v. Shugart, 316 N.W.2d 729 (Minn. 1982); Besel v. Viking Insurance Co. of Wisconsin, 146 Wash. 2d 730 (2002); Mo. Rev. Stat. § 537.065.
Assignee: evaluate federal jurisdiction and removal exposure. 28 U.S.C. § 1332; 28 U.S.C. § 1441; 28 U.S.C. § 1446.
All: preserve evidence; the claims file and demand correspondence are the core exhibits. Fed. R. Evid. 408 does not bar using settlement communications to prove reasonableness.

Deadlines table

Event	Deadline or period	Source	Note
Florida limits disclosure	30 days after written request	Fla. Stat. § 627.4137	Sworn statement covering each known policy, including excess and umbrella: insurer, insureds, limits, coverage defenses, copy of policy
California acceptance period	At least 30 days from transmission (email, fax, certified mail); 33 by mail	Cal. Civ. Proc. Code § 999.1	Pre-complaint demands only
California request for clarification or extension	Within the acceptance period	Cal. Civ. Proc. Code § 999.3	Not a counteroffer or rejection
California written explanation of non-acceptance	Before expiration, including agreed extensions	Cal. Civ. Proc. Code § 999.3	Relevant in later bad-faith suit
Georgia acceptance period	Not less than 30 days from receipt	O.C.G.A. § 9-11-67.1	2024 text: payment date not less than 40 days from receipt; applies to offers made on or after April 22, 2024
Missouri acceptance period	Not less than 90 days from the insurer's receipt	Mo. Rev. Stat. § 537.058	Does not apply to demands issued within 90 days of a jury trial in a filed case
Florida tender safe harbor	90 days after actual notice with sufficient evidence	Fla. Stat. § 624.155(4)	Tender the lesser of limits or amount demanded; applies to actions filed after March 24, 2023
Florida civil remedy notice cure	60 days	Fla. Stat. § 624.155	Applies to statutory claim
Insurer internal target	Acknowledgment within 1 business day; excess letter within 3; information requests within the first third of the window	Best practice	Courts examine timing
Payment after acceptance	As stated in the demand	Demand terms	Treat as a hard deadline

Common failure points

The unread demand. A demand sent to a general inbox sits for two weeks. The adjuster has 16 days left and no records review.
The incomplete release. The demand releases the driver but not the employer that owns the truck. The insurer cannot prudently accept, and the claimant later loses the bad-faith case.
The vague information request. On day 28, the insurer asks for "all records," which it already has. A court sees delay, not diligence.
The missed condition. The insurer accepts on time but issues the check on day 12 when the demand required payment within 10 days of acceptance.
The silent insured. The insured never learns of the demand and cannot hire counsel or push for settlement.

Short worked example. Kessler Mutual insures a delivery van that rear-ended a stopped car in Fresno, injuring a 58-year-old driver with a cervical fusion and $190,000 in charges. The policy limit is $100,000. On March 3, the claimant's lawyer emails a labeled time-limited demand to Kessler's designated address, with complete records, a full release of the driver and his employer, a lien satisfaction term, and a 30-day deadline. Kessler logs it the same day, sends an acknowledgment and an excess letter on March 4, and on March 11 asks for the identity of any Medicare Advantage plan and confirmation that the claimant's wife will sign the release. The lawyer answers on March 14. Kessler accepts in writing on March 25, matching every term. Each step appears in Phases 3 and 4, and each is something a court would look for if the case had gone the other way.

This document is general information, not legal advice for any particular situation; demand statutes and bad-faith standards differ by state and change frequently.