Time-Limited Demands and California’s Rules for Them
A settlement demand with a deadline is how an injured claimant forces an insurer to decide. In California the mechanics of making and answering one are now set out specifically, and getting them wrong matters to both sides.
Why the deadline exists at all
It removes indefinite consideration. If an insurer wants the protection of settling within limits, it has to decide while the offer stands — and if it lets a reasonable offer lapse and a larger judgment follows, that lapse becomes central to what happens next.
California prescribes the form
The statute addressing time-limited demands sets out what such a demand must contain and how it must be handled. That cuts both ways: a demand not meeting the requirements may not trigger the duty at all, while an insurer ignoring a compliant one is in a considerably worse position.
What it means if you are the insured
This is the point at which your own exposure becomes concrete. If a demand within your policy limits is on the table and your insurer is considering refusing it, say in writing that you want it settled. Counsel assigned by your insurer is defending you, but their interests and yours are not identical here.
And if a judgment lands above your limits
The refusal of a compliant within-limits demand is the foundation of an excess-judgment claim against your own carrier. Preserve the demand, the response, and everything you were or were not told.
Common questions
My insurer let a policy limits demand expire.
If a judgment later exceeds your limits, that lapse may make the excess your insurer’s responsibility rather than yours. Preserve the correspondence and get it reviewed.
Does a demand have to be in a particular form in California?
There are statutory requirements addressing time-limited demands, and whether a demand complied can determine whether the insurer’s duty was triggered.
Is your insurer treating you unfairly?
A free, confidential review can tell you whether what happened crosses the line — no cost, no obligation.
More on California insurance law
General information about California law, not legal advice. Every policy and every claim is different.