Before you start drafting a demand letter, it is important that you understand the core purpose: the goal of a demand letter is to make progress towards resolving your claim. In most cases, it is a very important step in the claims process.
Within a demand letter, a plaintiff — or more accurately, a potential plaintiff, as no case would have actually been filed at this point — is giving formal notice that they are considering and preparing to take legal action against a defendant.
To be clear, sending a demand letter is not the same thing as filing a lawsuit. It is a request (a demand) to settle a claim outside of litigation.