Why the first number is rarely the real number
Insurance adjusters routinely open negotiations with a conservative figure, expecting a counteroffer. Accepting that first offer typically closes the claim permanently — there's generally no going back to ask for more later, even if additional injuries or costs surface afterward.
A common misconception: no, you can't sue their insurer directly
Many people assume California's well-known insurance bad faith law lets them sue the at-fault party's insurance company directly for lowballing a claim. It doesn't. In Moradi-Shalal v. Fireman's Fund Insurance Companies, 46 Cal. 3d 287 (1988), the California Supreme Court held that an injured third-party claimant has no private right of action against the other side's insurer for unfair claims handling.
The real leverage works indirectly, and it's genuinely powerful
Here's what actually gives a documented demand teeth in California: in Crisci v. Security Insurance Co., 66 Cal. 2d 425 (1967), the California Supreme Court held that an insurer owes its own insured a duty to settle within policy limits when there's a substantial likelihood of a jury awarding more. If the insurer unreasonably rejects a clear settlement demand within those limits and a jury later awards an excess verdict, the insurer can be on the hook to its own insured for the entire amount above the policy limit — not just the policy limit itself.
Why this still helps the injured claimant
This duty runs to the insurer's own policyholder, not to you directly — but it still shapes how the insurer behaves toward your claim. A clear, well-documented demand within the at-fault party's policy limits puts real pressure on the insurer to take it seriously, because rejecting it risks a kind of exposure the insurer genuinely wants to avoid, regardless of who ultimately benefits from the eventual verdict.
What this means practically
The real takeaway is that precision matters in California: a clearly documented, policy-limits settlement demand carries more actual legal weight here than a vague request for "fair compensation." Comparing the insurer's offer against your own complete tally of damages, and making any demand explicit and well-supported, is the practical step this history actually supports.