The goal of a demand letter is to resolve your case as quickly as possible. It’s a tool that you can use to approach the insurance company to ask them to settle the case. Even though it’s titled a demand letter, it’s actually a piece of formal negotiations between you and the insurance company.
Insurance companies carefully weigh their options. If litigation is going to be expensive and you have a strong case, the insurance company might conclude that it’s in their best interests to pay you fairly for your losses. When the insurance company can see what you’re asking for and why, they might agree to pay you an amount that you believe is fair.