Free template

Payment Plan or Settlement Offer Letter

By Serdar Arslan, editor · Last reviewed November 3, 2026 · How we research

Use this letter when you were uninsured (or your coverage did not apply), you have checked the claim, and you accept that you owe something on a car accident damage demand. It offers either a monthly payment plan or a reduced lump sum, and it asks the other side to confirm the terms in writing before you pay. Insurers' subrogation units and collectors often consider these offers, because a lawsuit costs them money too, but nothing requires them to accept.

Offer only what you can actually pay. A missed payment can restart collection, and in some states (Texas is one) defaulting on an installment agreement filed with the state can lead to a license suspension. If you have received a state suspension notice, ask the payer to sign the form your DMV accepts, such as a release or an installment agreement form, and check the deadline on the notice.

Pick one option and delete the other. Pay by a traceable method and keep every receipt. Read the release they send before you sign it; see our guide.

[Your full name]
[Your mailing address]
[Your phone number]
[Your email address]

[Date of this letter]

[Company or agency that sent the demand]
[Their mailing address]

Re: Offer to resolve your claim
Your reference: [Their claim or reference number]
Date of crash: [Date of the crash]
Amount demanded: [Amount they say you owe] (your letter dated [Date on their letter])

To whom it may concern:

I am writing to resolve your claim for the crash on [Date of the crash]. This offer is made for settlement purposes only and is not an admission of fault.

[Optional: short reason for the offer]

My offer:
[Option A: payment plan offer]
[Option B: lump-sum offer]

Before I make any payment, please confirm in writing:
  1. The total amount that will fully settle this claim.
  2. The payment schedule, where to send payments, and how a late payment will be handled.
  3. That you will not file a lawsuit or ask any state agency to take action against my license or registration while I keep to the agreed terms.
  4. That when I finish paying (or on receipt of the lump sum), you will send me a signed written release of all claims arising from this crash, on behalf of your company and your insured.
  5. If a state form is needed to prevent or lift a license suspension, that you will sign and return it.

I will pay by check, money order or bank transfer, not cash, and I ask for a written receipt for each payment.

Please reply in writing to the address above.

Sincerely,


[Your full name]

Tips

Only make this offer after you have seen proof of the amount and the basis for fault. The dispute letter template asks for both.
Offer a monthly amount you can keep paying. Missing payments can undo the agreement.
Do not send any money until you have the agreed terms in writing.
Check that the release covers both the insurer and its customer, and all claims from the crash.
If the demand is large or a lawsuit has been filed, consider talking to a lawyer before you agree to anything.

Sources

Sending it and keeping proof

Keep a copy of everything you send. If a deadline or a response time matters, send letters by a method that gives you proof of delivery, such as certified mail with a return receipt, or email with a read receipt, and note the date in your claim file. Many insurers and agencies also accept uploads through an online portal, so save the confirmation screen or email.

Payment Plan or Settlement Offer Letter

Tips

Sources

Sending it and keeping proof

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