Insurance Bad Faith Demand Letter - Montana

MONTANA INSURANCE BAD FAITH DEMAND LETTER

Before sending: select the insured or third-party route, fill every factual and monetary field, and remove unsupported allegations. A third-party claimant may file a § 33-18-242 action only after the underlying claim is settled or judgment is entered in the claimant's favor.

Date: [__/__/____]

Via: ☐ Certified mail ☐ Email ☐ Other: [________________________________]

To: [INSURER'S FULL LEGAL NAME]
Address: [________________________________]
Attention: [CLAIMS MANAGER OR COUNSEL]
Email: [________________________________]

From: [CLAIMANT OR COUNSEL NAME]
Address: [________________________________]
Email and telephone: [________________________________]

Re: Demand concerning Policy No. [________________________________], Claim No. [________________________________]

Dear [________________________________]:

I represent [CLAIMANT NAME] concerning the claim identified above. [CLAIMANT NAME] is ☐ an insured or covered person under the policy ☐ a third-party claimant asserting a claim against your insured, [INSURED NAME]. This letter requests resolution of the underlying insurance claim and the documented harm caused by the claim handling described below.

Policy, loss, and claim record

The relevant policy provision states: “[QUOTE APPLICABLE POLICY LANGUAGE].” The loss or third-party liability arose when [DESCRIBE THE EVENT AND EVIDENCE]. On [DATE], [INSURER] [DENIED COVERAGE / REFUSED PAYMENT / OFFERED $____ / DELAYED A DECISION]. Its stated reason was [QUOTE OR SUMMARIZE THE ACTUAL EXPLANATION]. The documents enclosed with this letter support [DESCRIBE THE CLAIMED COVERAGE OR LIABILITY AND AMOUNT].

Claim handling that requires a response

Mont. Code Ann. § 33-18-242 permits an insured or third-party claimant to seek actual damages caused by a violation of the specified parts of § 33-18-201. We identify only the following concerns supported by the enclosed record:

• ☐ Misrepresentation, § 33-18-201(1): [EXACT STATEMENT, CORRECT FACT OR POLICY LANGUAGE, DATE, AND EXHIBIT].
• ☐ Refusal without reasonable investigation, § 33-18-201(4): [PAYMENT REFUSED, AVAILABLE EVIDENCE NOT EXAMINED, AND EXHIBIT].
• ☐ Failure to affirm or deny coverage within a reasonable time after completed proof, § 33-18-201(5): [PROOF COMPLETION DATE, COVERAGE DECISION DATE OR LACK OF DECISION, AND EXHIBIT].
• ☐ Failure to attempt a prompt, fair settlement when liability became reasonably clear, § 33-18-201(6): [DATE LIABILITY BECAME REASONABLY CLEAR, EVIDENCE, OFFER HISTORY, AND EXHIBIT].
• ☐ Altered application or cross-coverage pressure, § 33-18-201(9) or (13): [SPECIFIC FACTS AND EXHIBIT, IF APPLICABLE].

Please identify any reasonable basis in law or fact for contesting the claim or amount and provide the policy provision, claim evidence, and calculation on which you rely. Section 33-18-242(6) makes that basis material to any statutory action.

Amount and proposed resolution

We request a written acceptance by [DATE] at [TIME] Mountain Time and payment by [DATE], by [PAYMENT METHOD]. In exchange, [CLAIMANT] will execute a mutually agreed release limited to [DESCRIBE CLAIMS AND RELEASED PARTIES]. The parties must agree on any treatment of liens, subrogation, or third-party claims before payment. Please send a written explanation of any counteroffer with an itemized amount and the factual and policy basis for each disputed item.

If [CLAIMANT] is an insured and has been forced to bring legal action to obtain the full policy benefit, counsel will evaluate attorney fees under Mountain West Farm Bureau Mutual Insurance Co. v. Brewer, 2003 MT 98, ¶ 36. Such fees are not an automatic item of the § 33-18-242 claim. We reserve any request for exemplary damages for a court proceeding if the evidence satisfies § 27-1-221's actual-fraud or actual-malice and clear-and-convincing standards, subject to § 27-1-220(3).

Please preserve the claim file, policy and endorsements, adjuster notes, communications, estimates, photographs, recordings, and electronic records concerning the loss, coverage, valuation, and settlement authority. Please confirm receipt of this letter and identify the person who will respond.

This offer expires at the stated time unless extended in writing. The expiration does not waive the policy claim or any otherwise available statutory remedy.

Sincerely,

[CLAIMANT OR COUNSEL NAME]
Signature: ______________________________
Title or Montana Bar No., if applicable: [________________________________]
Date: [__/__/____]

Enclosures:

1. [POLICY AND APPLICABLE ENDORSEMENTS]
2. [PROOF OF LOSS OR UNDERLYING LIABILITY MATERIAL]
3. [CLAIM CORRESPONDENCE AND INSURER DECISION]
4. [DAMAGE SUPPORT AND ITEMIZED CALCULATION]
5. [OTHER: ________________________________]

Delivery record: Sent by [METHOD] on [DATE]; tracking or confirmation [________________________________].