To properly reject an insurance settlement offer, you must communicate the rejection in writing through a formal demand letter. Rejecting an insurance settlement offer is something that should always be done formally, in a professionally drafted response.You should first submit a letter that outlines your refusal. The purpose of this rule is to set forth uniform minimum standards for the investigation and disposition of property and casualty claims. We recommend that you reject the offer in writing rather than over the phone. Why Do Insurance Companies Offer Unfair Settlements? The short answer is that every insurance company exists to make a profit. Most jurisdictions require a meet-and-confer letter for deficient discovery request responses before you can file a motion to compel. The first thing to know here is that insurance adjusters have the insurance company's interests in mind. They're not looking out for your best interests.