Policy Limits Demands in California: How CCP § 999 Works

Your medical bills are climbing, you have missed weeks of work, and you just learned the driver who hit you carries the state minimum. The question is no longer what your claim is worth. It is how much of that value you can actually collect. This post explains what a policy limits demand is, the rules California now imposes on it, and the mistakes that let an insurer walk away from one.

The ceiling you are working under

Every liability policy has a cap. In California, the minimum a driver must carry is $30,000 for injury or death to one person, $60,000 for injury or death to more than one person, and $15,000 for property damage, according to the DMV, which cites Insurance Code § 11580.1b. Those minimums took effect on January 1, 2025 under SB 1107. Before that, the floor was 15/30/5, meaning $15,000 per person.

Some drivers carry more than the minimum, and some carry exactly that. If your injuries required surgery, a hospital stay, or months of therapy, your losses can pass $30,000 quickly, and at that point the policy limit, not the value of your injuries, becomes the number that matters most.

That is the setting where a policy limits demand comes in.

What a policy limits demand is

A policy limits demand is a written offer to settle your claim against the at-fault driver for the full amount of their coverage, or less, within a set deadline. In plain terms: "Pay the limit by this date and your insured is released."

It matters for a reason the insurer understands very well. If the insurance company turns down a reasonable chance to settle within limits and the case later produces a judgment above the policy, the insurer can face what lawyers call extracontractual or bad faith exposure. The Clark Hill summary of the law notes that policy limit demands have been used to set up exactly those claims. That pressure is what gives a well-built demand its weight.

California's rules since 2023: CCP § 999

Senate Bill 1155 added Code of Civil Procedure §§ 999 and following, effective January 1, 2023. It sets out what a "time-limited demand" must contain when it is made before a lawsuit or arbitration is filed, for claims under automobile, homeowner, or commercial premises liability policies, according to Clark Hill. It covers property damage, bodily injury, and wrongful death claims.

Based on the summaries from Clark Hill and Wood Smith Henning & Berman, a compliant demand must:

Be in writing and be labeled as a time-limited demand, or reference the statute.
Make a clear and unequivocal offer to settle all claims within policy limits, including satisfaction of all liens.
Offer a complete release of the insurer's insured for the incident.
State the date and location of the loss, and the claim number if you know it.
Describe all known injuries.
Include reasonable proof supporting the claim and damages, such as medical records or bills.
Give the insurer enough time: at least 30 days to respond if the demand is sent by email, or 33 days if sent by mail.
Go to the right place, meaning the assigned claim representative or the address the insurer has designated for these demands.

The insurer is allowed to ask for clarification, more information, or an extension, and Clark Hill notes the statute says such a request is not, by itself, a counteroffer or a rejection. If the insurer rejects the demand, it has to say so in writing before the deadline and explain why.

Why getting it wrong is costly

Here is the part that matters most. According to Wood Smith Henning & Berman, the statute provides that a time-limited demand that does not substantially comply with these rules "shall not be considered to be a reasonable offer to settle the claims against the tortfeasor."

Translated: a sloppy demand loses its teeth. If you send a demand that gives the insurer two weeks instead of 30 days, forgets the liens, or arrives with no medical records attached, the insurer can let it expire without the pressure a proper demand creates. The leverage that gets limits paid comes from compliance, not from the word "demand" at the top of a letter.

This is also where insurers have a natural advantage. Handling demands is routine for a claims department. For most injured people, it is a first.

Common mistakes before the demand goes out

Most problems happen before anyone drafts the letter:

Demanding before you know your injuries. If you are still in treatment, you cannot describe all known injuries well, and a release you offer covers everything, including complications that show up later. The first offer is almost always a lowball for the same reason: it arrives before the picture is complete.
Ignoring liens. A compliant demand has to address liens. Health insurers, medical providers, and government programs may all have a claim on your recovery, and they do not disappear because the settlement is small.
Forgetting your own policy. If you carry underinsured motorist coverage, accepting the at-fault driver's limits without notifying your own insurer can jeopardize that coverage. Our post on uninsured and underinsured drivers walks through how that gap coverage is calculated.
Giving the adjuster ammunition first. Whatever you said in an early phone call will be weighed against your demand. If you have not spoken to the insurer yet, read about recorded statement traps before you do.

What this means in California

A policy limits demand is a tool inside a claim, not a separate claim, so the usual California rules still apply around it.

The statute of limitations for personal injury under CCP § 335.1 is generally two years from the date of injury. Sending a demand does not pause that clock, and an insurer that strings out the process does not extend it for you. If a public entity is involved, such as a city vehicle or a dangerous public road, a government claim is usually due within six months, which is far sooner.

California's pure comparative negligence rule also shapes the math. If you share some fault, your damages are reduced by your percentage rather than wiped out. That matters when deciding whether your claim is worth more than the limits in the first place: a claim worth $100,000 with 40 percent of the fault on you is worth $60,000, which is still well above a $30,000 policy.

Practical next steps

Find out the at-fault driver's policy limits as early as you can, in writing. Keep every medical bill, record, and receipt organized, because the demand is only as good as the proof attached to it. Track who has paid for your care so liens can be identified. Check your own declarations page for underinsured motorist and medical payments coverage. And do not send, accept, or sign anything that releases the at-fault driver until you understand what it does to the rest of your recovery. If you want a second set of eyes on it, a consultation with our firm is free and there is no fee unless there is a recovery.