The Final Countdown: Time-Limited Demands in California

The Final Countdown: Time-Limited Demands in California

Senate Bill 1155 (“SB 1155”), sponsored by Senator Anna Caballero, passed on September 28, 2022.[i]  This bill heralds some important changes impacting claims professionals and their efforts to appropriately respond to time-limited demands.  SB 1155 clearly defines a time-limited demand, as well as its applicable causes of actions or claims.[ii]  In addition, SB 1155 describes how claims professionals must handle time-limited demands, as well as what the demands mean in the context of litigation.


What Should the Demand Contain?

According to the bill, time-limited demands should be written and labeled as a time-limited demand or reference the section of the law on time-limited demands.[iii]  This will help prevent opposing counsel from trying to sneak in a time-limited demand without calling it out as such. Further, the time-limited demand should include certain material terms, including claim number, date, location, reasonable proof, and “a clear and unequivocal offer to settle all claims within policy limits, including the satisfaction of all liens.”[iv] This clarification by SB 1155 will force opposing counsel to better define the terms of the demand rather than issuing an intentionally vague demand difficult or impossible to interpret or accept by the defense.


How and When Should the Demand Be Handled?

In addition to specifics regarding what must be in the demand, SB 1155 also contains specific requirements for issuance and response times.  The demand should be sent to an email or physical address if provided, or the assigned insurance representative—“if known.”[v]  Once received, “…the time period within which the demand must be accepted shall be not fewer than 30 days from date of transmission of the demand, if transmission is by email, facsimile, or certified mail, or not fewer than 33 days, if transmission is by mail.” This key provision of SB 1155 seeks to prevent the unfair demand received late on a Friday with a Monday morning deadline to respond.


What Cases Does This Apply To?

This new statute will not apply to all cases.  Specifically, the statute targets: “automobile, motor vehicle, homeowner, or commercial premises liability insurance policies for property damage, personal or bodily injury, and wrongful death claims.”[vi] As most tricky time limit demands stem from high exposure or hotly contested personal injury claims, the applicability of SB 1155 will assist claims representatives responding to such demands in those types of matters.


What Happens If the Demand is Not Accepted?

If an insurer does not accept the demand, it shall notify claimants before the demand expires, and this notification “shall be relevant in any lawsuit alleging extracontractual damages against the tortfeasor’s liability insurer.”[vii]  Here, SB 1155 helps protect an insurer from empty but impactful threats of bad faith from the demanding claimant. Further, demands which do not “substantially comply with the terms of this chapter will not be considered a reasonable offer to settle…”[viii] This clarification helps an insurer and its counsel determine the extent of response required by the demand and whether it may serve as grounds for an extracontractual claim down the road.



Claims professionals should be aware of the new rules for certain cases based on SB 1155.  This bill impacts handling of claims right from the very start, so defense professionals must stay aware of all deadlines and new information they need to handle as soon as the clock starts ticking.  Claims representatives should review the full text of the new bill, found here, to ensure time-limited demands are in compliance and an appropriate response plan is in place, including a timely acceptance or denial.




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[i] 2021 California Senate Bill No. 1155, California 2021-2022 Regular Session.

[ii] Id.

[iii] 2021 California Senate Bill No. 1155, California 2021-2022 Regular Session.

[iv] Id.

[v] Id.

[vi] 2021 California Senate Bill No. 1155, California 2021-2022 Regular Session.

[vii] Id.

[viii] Id.