top of page

California’s Time Limited Demand Statute § 999 Effective January 1, 2023


On September 28, 2022, Governor Gavin Newsom signed into law Senate Bill 1155 which provides a framework for “time-limited” liability demands. The bill went into effect on January 1, 2023 and was adopted as § 999 of the Code of Civil Procedure.

This section applies only to claims covered under automobile, motor vehicle, homeowner, or commercial premises liability policies for property damage, bodily injury or wrongful death claims. As a result, California attorneys should implement the language of this statute in “time-limited demands” going forward.

A “time-limited” demand as defined in § 999 is an offer to the at-fault party to settle a claim or cause of action for bodily injury, property damage, or wrongful death within the liability insurance policy limits. The offer must be accepted within a specified period of time.

What does a California “Time-Limited Demand” include?

The new law requires that a time-limited demand must be in writing, be labeled as a “time-limited demand” or provide reference to § 999 et seq., while also containing material terms such as:

(1) Time Period of Acceptance - In California, the time period for acceptance of a time limited demand depends upon the method of transmission of the offer. If transmission of the demand is by email, fax or certified mail, the demand must be accepted in 30 days from the date of transmission. If transmission of the demand is by regular mail, the demand must be accepted in 33 days from the “date of transmission.”
(2) Clear and Unequivocal Offer - The demand must include a clear and unequivocal offer to settle all claims within the policy limits, including the satisfaction of all liens.

(3) Complete Release - The demand must include an offer for the complete release of the claimant for the liability insurer’s insured from all present and future liability for the occurrence.

(4) Date of Loss and Location of Loss - The demand must include the date and location of the loss.

(5) Claim Number - The demand must include reference to the applicable claim number (if known).

(6) Description of Injuries - The demand must include a description of known injuries suffered by the claimant.

(7) Reasonable Proof - The demand must include reasonable proof to support the claim such as medical records, bills, photos, etc.

How is “date of transmission” defined by § 999.1?

One interesting aspect of California’s Time-Limited Demand Statute is that the legislature failed to define “date of transmission.” Transmission is “the process of passing something from one place to another.” It is likely that various disputes regarding the time period of acceptance may arise between Plaintiffs and Insurers due to interpretation of what “date of transmission” means. To prevent any confusion, I would recommend including specific language in your time-limited demands that clearly defines what the date of transmission means (for example, “transmission means when sent” or “transmission means when sent and not when received.”)

Where to send a California “Time-Limited Demand?”

A claimant must send their time-limited demand to either:

(1) The email address or physical address designated by the liability insurer. If an address has been provided to the Department of Insurance, the Department shall make it publicly available. (For a list of current insurer contact information provided by the California Department of Insurance, follow this link: http://www.insurance.ca.gov/01-consumers/upload/SENATE-BILL-1155-update-2-27-23.pdf ).

(2) The insurance representative assigned to the claim, if known.

How is a California “Time-Limited Demand” accepted?
(1) Recipients of a time-limited demand may accept it by providing written acceptance of the material terms as outlined in § 999.1 in its entirety.

(2) Requests for clarification, additional information or requests for an extension made during the time period of acceptance is not considered a counter offer or rejection of the demand.

(3) Under the statute, if for any reason, an insurer does not accept a time-limited demand, the insurer shall notify the claimant in writing regarding the basis for its decision. This notification must be sent prior to the expiration of the time-limited demand, including any extension agreed to by the parties. This notification shall also be relevant in any lawsuit alleging extracontractual damages against the tortfeasor’s liability insurer.
What happens if a California “Time-Limited Demand” does not substantially comply with the statute?

Under the new law, a time-limited demand that does not substantially comply with the terms of § 999 et seq., will not be considered a reasonable offer to settle claims against the tortfeasor. This is relevant for purposes of any lawsuit alleging extracontractual damages against the tortfeasor’s liability insurer. It should be noted, however, that this section does not apply to a claimant who is unrepresented by counsel.
Sources:

Disclaimer: Chris Allen is a licensed attorney in Georgia and California. Any content provided herein or on this website shall not be construed as legal advice. Should you have any questions that are legal in nature, please contact our office or a licensed attorney in your respective jurisdiction.

Comments


bottom of page