This section highlights California's policy of encouraging quick settlements of civil cases because it benefits everyone involved, like claimants, policyholders, and insurers. It explains what 'extracontractual damages' are, which means any damages that go beyond what the insurance policy covers for things like property damage or personal injuries. It also defines a 'time-limited demand' as a specific offer to settle a claim before a lawsuit is filed, which needs to be accepted within a certain time and stay within the insurance limits.

This law explains how to properly make a time-limited demand to settle a claim. The demand must be written and clearly labeled as time-limited, giving at least 30 days for acceptance if sent digitally or by certified mail, and 33 days if sent by regular mail. It should clearly state an offer to settle within policy limits, release the insurer's insureds from liability, include essential details about the incident like date and location, specify the claim number if available, describe all known injuries, and provide reasonable proof, such as medical documentation, to support the claim.

If someone wants to make a time-limited demand to an insurance company, they need to send it to an address or email that the insurance company has provided, or to the insurance representative handling their claim. The Department of Insurance is responsible for posting these addresses online. Also, anything the Department does under this rule is considered a choice they make, not a requirement.

This law discusses how time-limited demands, which are specific offers to settle a claim, are handled. A recipient of such a demand can accept by fully agreeing to the terms in writing. If they ask for more information or time to investigate, that request won’t automatically count as rejecting the offer. If an insurer decides not to accept the demand, they must explain their decision in writing before the deadline. This explanation is important if there are later legal claims for extra damages against the insurer.

This law states that in a lawsuit involving a claimant trying to settle with an insurance company, any offer to settle must follow the rules laid out in this chapter to be considered reasonable. If the offer doesn't follow these rules, it won't be seen as fair or reasonable for purposes of suing an insurer for damages beyond what the insurance policy covers. However, these rules do not apply if the person making the claim doesn't have a lawyer. Lastly, if there's any conflict between this law and the Civil Discovery Act, the Civil Discovery Act takes priority.

This law explains that it applies to cases involving property damage, personal injury, and wrongful death that are covered by certain types of insurance policies, like those for cars or homes. It makes clear that other existing laws still apply, particularly those about what can be claimed or defended in court, except for what's specifically covered here. Also, this only applies to demands made after January 1, 2023.