Glossary
Time-limited demand
A settlement offer to an insurer that must be accepted within a stated period. Some states set rules for what such a demand must contain and how long it must stay open.
General information, not legal advice. Talk to a licensed attorney in your state.
Quick answer
A time-limited demand is an offer to settle a claim, usually within the at-fault driver's Policy limits. The most an insurance policy will pay for one claim or one accident, no matter how large the losses are. Glossary, that the insurer must accept by a stated deadline. If the insurer does not accept in time, the offer expires.
In a car accident claim#
These demands are usually sent by an injured person's lawyer when the injuries are serious and the at-fault driver's coverage looks too small. The stakes are high for the insurer. Unfair claims practice laws modeled on an NAIC act list as an unfair practice not attempting in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear. In many states, an insurer that unreasonably passes up a chance to settle within its limits can face a Bad faith. An insurer's unreasonable refusal or delay in paying a valid claim. Many states allow extra penalties for it. Glossary claim for the amount of a later verdict above them.
Because of those stakes, some states regulate these demands. Missouri is one example: a time-limited demand must be in writing, refer to the statute and go to the insurer by certified mail, return receipt requested, must stay open at least 90 days after the insurer receives it, and must allow at least 10 days for payment after the insurer receives the signed release. It must also include a list of treating providers with HIPAA-compliant authorizations, plus a list of employers with authorizations if lost wages are claimed.
The guide to demand letters explains how demands are put together, and settlement negotiation covers what usually follows.
Example#
Related terms#
Questions people ask
Is a time-limited demand the same as a demand letter?
It is a type of demand letter. Any demand letter asks for payment; a time-limited demand adds a firm deadline to accept, and in some states it must follow specific rules.
What happens if the insurer misses the deadline?
The offer lapses, and the case continues, often toward a lawsuit. Whether the insurer can later be liable above its policy limit depends on state law and on whether its response was reasonable.
Sources
- Revisor of Missouri, RSMo § 537.058 — time-limited demand requirements
- NAIC, Unfair Claims Settlement Practices Act (Model 900), Sec. 4 — as of October 2026
Last reviewed October 29, 2026 by the Accident Claim Facts editorial team. Found an error? Tell us.
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