← Closing letters

Standard Closing Letter (Pro Rata)

Send toClient
WhenMoney collected in a pro rata state

💡 When to use it

Send this closing letter to your client after a recovery when the loss state follows a pro rata rule. The insured and the client share any shortfall in proportion to their losses, so the insured gets back the same percentage of their deductible that the client recovered on its payment. For made whole states, use the made whole version.

  • Lead with the win. The first sentence tells the client the recovery was successful and how much was collected.
  • Show the percentage. State the recovery percentage in the letter so the client can check the deductible math at a glance.
  • Check the policy language too. Some policies change how the deductible is shared, whatever the state's default rule.
  • Apply the fee the way your agreement says. A fee is usually taken from the client's share only, not the insured's deductible, but confirm your service agreement.
  • Say where the deductible went, and send the insured the deductible reimbursement letter.

Worked example. In this made-up example, the client paid $20,000.00, the insured's deductible was $1,000.00, and the total claim was $21,000.00. The file settled for $14,700.00, and the recovery fee is 25% of the client's share.

Item Amount
Total claim $21,000.00
Total amount recovered $14,700.00
Recovery percentage 70%
Insured's deductible $1,000.00
Deductible reimbursed to insured (70%) $700.00
Client's share of recovery $14,000.00
Recovery fee (25% of client's share) −$3,500.00
Net amount to client $10,500.00

The formula: recovered ÷ total claim = recovery percentage. Multiply the deductible by that percentage to get the insured's share. Here, $14,700 ÷ $21,000 = 70%, and 70% of $1,000 is $700.

✉️ The letter

Fill in the boxes and the letter updates as you type. Anything you leave blank stays [in brackets]. What you type stays on your device. Free downloads and prints include a light Subrobuddy watermark.

[Client Name]
Attn: [Client Contact Name]
[Street Address]
[City, State ZIP]

[Today's Date]

RE: Recovery Complete — Closing Letter

Insured: [Insured's Name]
Your Claim No.: [Client Claim Number]
Our File No.: [Your Company File Number]		Date of Loss: [Date of Loss]
Loss Location: [Loss Address, including State]
Responsible Party: [Responsible Party or Adverse Carrier]

Dear [Client Contact Name]:

We are pleased to report that our office has successfully recovered $[Total Recovered] from [Responsible Party or Adverse Carrier] for the loss on [Date of Loss]. This file is now closed. A breakdown of the recovery is shown below.

Deductible reimbursement to the insured

Because this loss occurred in [Loss State], which follows a pro rata rule, the recovery is shared in proportion to each party's loss. The total claim was $[Total Claim], and $[Total Recovered] was recovered, which is [Recovery %]% of the claim. [Insured's Name] is therefore reimbursed [Recovery %]% of their $[Insured's Deductible] deductible, the same percentage [Client Name] recovered on its payment.

The insured's deductible reimbursement of $[Deductible Owed to Insured] [has been issued directly to the insured / is included in this payment for you to forward to the insured].

Recovery fee

[If a fee applies:] Per our service agreement, a recovery fee of [Fee %]% has been applied to [Client Name]'s share of the recovery.

Recovery breakdown

Item Amount
Total claim (paid damages + deductible) $[Total Claim]
Total amount recovered $[Total Recovered]
Recovery percentage [Recovery %]%
Insured's deductible $[Insured's Deductible]
Deductible reimbursed to insured ([Recovery %]%) $[Deductible Owed to Insured]
[Client Name]'s share of recovery $[Total Recovered − Deductible Owed to Insured]
Recovery fee ([Fee %]%) −$[Fee Amount]
Net amount to [Client Name] $[Net Amount]

[A check for $[Net Amount] is enclosed / Payment of $[Net Amount] has been issued by [check / ACH] on [Payment Date].]

If you have any questions about this recovery or the breakdown above, please contact our office. Thank you for the opportunity to handle this matter.

Sincerely,

[Name]
[Title]
[Company]
[Address]
[Phone] · [Email]