UM/UIM Demand Letter - Colorado

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) POLICY LIMITS DEMAND

State of Colorado

[LAW FIRM LETTERHEAD]

SETTLEMENT COMMUNICATION — SUBJECT TO CRE 408
TIME-LIMITED POLICY LIMITS DEMAND

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND VIA EMAIL TO: [________________________________]

Date: [__/__/____]

[INSURANCE_COMPANY_NAME]
[________________________________]
[________________________________]
[CITY], [STATE] [ZIP]

Attention: [________________________________], UM/UIM Claims Supervisor

Re: FORMAL DEMAND FOR UM/UIM POLICY LIMITS — COLORADO LAW
Insured/Claimant: [________________________________]
Policy Number: [________________________________]
Claim Number: [________________________________]
Date of Loss: [__/__/____]
Location of Loss: [________________________________], Colorado
UM/UIM Policy Limits: $[____] per person / $[____] per accident
Tortfeasor: [________________________________]
Tortfeasor's Carrier: [________________________________]
Tortfeasor's Liability Limits: $[____] per person / $[____] per accident
Response Deadline: [__/__/____] at 5:00 p.m. Mountain Time

Dear [________________________________]:

I. INTRODUCTION AND NATURE OF DEMAND

This firm represents [________________________________] ("our client" or "the Insured") in connection with a first-party claim for uninsured/underinsured motorist benefits arising from a motor vehicle collision that occurred on [__/__/____] in [________________________________], Colorado. This letter constitutes a formal, time-limited demand for payment of the full UM/UIM policy limits of $[____] available under the above-referenced policy issued by [INSURANCE_COMPANY_NAME] ("the Carrier").

Colorado's uninsured/underinsured motorist statute, C.R.S. section 10-4-609, supplies gap-filling first-party protection when an insured establishes the uninsured or underinsured motorist's liability and covered damages. See Progressive Direct Insurance Co. v. Ortiz, 2026 CO 40, paragraphs 1-2.

Based on the enclosed records and the policy analysis below, our client's damages exceed both the applicable liability limits and the available UM/UIM limits. We therefore demand the full available UM/UIM limits of $[____] by [__/__/____]. Any further remedies depend on the Carrier's conduct and the proof required by applicable law.

II. COLORADO UM/UIM STATUTORY FRAMEWORK

A. Colorado's Mandatory UM/UIM Coverage Statute — C.R.S. section 10-4-609

Under C.R.S. section 10-4-609(1)(a), an automobile liability policy delivered or issued for delivery in Colorado must provide UM/UIM coverage unless the named insured rejects it in writing. Under subsection (2), before issuance or renewal the insurer must offer the named insured the right to obtain UM/UIM coverage equal to the insured's bodily-injury liability limits, but need not offer higher limits. A named insured may select lower limits, subject to the statutory minimum and any special rules applicable to the policy.

Colorado's minimum liability limits are $25,000 per person / $50,000 per accident for bodily injury and $15,000 per accident for property damage under C.R.S. section 10-4-620. Those liability minima do not establish the UM/UIM limits in every policy; review the declarations, endorsements, and any written selection or rejection.

B. Colorado's UIM Gap-Filling Framework — C.R.S. section 10-4-609(1)(c), (4)

For policies subject to the current law, C.R.S. section 10-4-609(1)(c) makes UM/UIM coverage additional to legal-liability coverage and covers the difference between the applicable liability limits and the insured's covered damages, excluding exemplary damages, up to the purchased UM/UIM limit. Subsection (4) includes underinsured-motorist protection within uninsured-motorist coverage.

The amount due therefore depends on the proven covered damages, applicable liability limits, purchased UM/UIM limit, policy terms consistent with section 10-4-609, and prior payments. A full-limits demand is appropriate only when that grounded calculation reaches or exceeds the available limit.

C. Colorado Stacking Rules — C.R.S. section 10-4-609(1)(c), (2)

Section 10-4-609 does not make all available limits automatically stackable. A policy may limit a single-premium, multi-vehicle UM/UIM endorsement to one application per accident. Subsection (2) also permits anti-stacking provisions for a single multi-vehicle policy or multiple policies issued by the same or an affiliated insurer to the insured or a resident relative, while protecting stacking with a separate policy that covers the insured but was not issued to the insured or a resident relative.

The available coverage must be mapped policy by policy, including the issuing insurer, named insureds, resident relatives, covered vehicles, other-insurance language, and any enforceable anti-stacking provision.

D. Coverage Analysis

E. UM/UIM Trigger Analysis Under C.R.S. section 10-4-609

The claim potentially triggers UM/UIM coverage because:

• ☐ Tortfeasor carried only statutory minimum limits of $25,000/$50,000;
• ☐ Our client's covered damages exceed the applicable liability limits;
• ☐ The applicable liability coverage is unavailable or insufficient; and/or
• ☐ The tortfeasor cannot be located for service or the investigating agency's report does not disclose the tortfeasor's insurer, subject to C.R.S. section 10-4-609(6); and/or
• ☐ The tortfeasor was an unidentified hit-and-run driver; the policy's notice, proof, and cooperation terms have been reviewed.

III. THE COLLISION AND COLORADO LIABILITY ANALYSIS

A. Facts of the Collision

On [__/__/____] at approximately [____] [AM/PM], our client was [________________________________] on [________________________________] in [________________________________], Colorado, when the tortfeasor [________________________________].

[DETAILED_FACTUAL_NARRATIVE]

B. Tortfeasor's Negligence

The evidence supports negligence based on the following conduct; counsel should insert only factually supported statutory citations:

• ☐ Excessive or unsafe speed;
• ☐ Failure to yield the right of way;
• ☐ Driving while impaired;
• ☐ Following too closely;
• ☐ Distracted driving or unlawful device use;
• ☐ Disregarding a traffic-control signal or device;
• ☐ Common law negligence — failure to keep proper lookout;
• ☐ Other: [________________________________].

C. Our Client's Freedom from Comparative Fault — C.R.S. section 13-21-111

Colorado applies modified comparative negligence under C.R.S. section 13-21-111. In a single-tortfeasor claim, recovery is barred when the claimant's negligence is equal to or greater than the tortfeasor's negligence; otherwise damages are reduced in proportion to claimant fault. When multiple defendants or designated nonparties are involved, comparison and allocation require the combined-fault and pro-rata analysis under C.R.S. sections 13-21-111 and 13-21-111.5. Our client bears zero percent comparative fault based on [identify evidence].

If comparative fault is disputed, the UM/UIM calculation must be recomputed using the fault allocation and resulting legally recoverable damages.

IV. OUR CLIENT'S INJURIES AND TREATMENT

A. Injury Summary

As a direct and proximate result of the tortfeasor's negligence, our client sustained the following injuries:

• ☐ [________________________________]
• ☐ [________________________________]
• ☐ [________________________________]

B. Treatment Providers and Timeline

C. Permanent Impairment (AMA Guides)

D. Prognosis

[________________________________]

V. DAMAGES

A. Past Medical Expenses

List the reasonable and necessary medical charges supported by the records and bills. Colorado's evidentiary and post-verdict collateral-source rules are distinct and fact-specific; counsel should separately document billed charges, amounts paid, liens, write-offs, and out-of-pocket obligations without promising that every billed dollar will be recoverable.

B. Future Medical Expenses (Present Value)

C. Past and Future Lost Earnings / Earning Capacity

• Past lost wages: $[____]
• Future lost earning capacity (PV): $[____]

D. Non-Economic Damages — Subject to C.R.S. section 13-21-102.5

To the extent C.R.S. section 13-21-102.5 applies to the recoverable tort damages, subsection (3)(a)(II) sets a $1,500,000 noneconomic-damages cap for civil actions filed on or after January 1, 2025, with inflation adjustment scheduled beginning January 1, 2028. The former exceptional-circumstances increase does not apply to that tier. Counsel should confirm the filing-date rule and any claim-specific exception before calculating the demand.

E. Damages Summary

VI. SETTLEMENT WITH TORTFEASOR AND CONSENT-TO-SETTLE

A. Status of Liability Settlement

We [HAVE REACHED / ARE FINALIZING] a tentative settlement with [TORTFEASOR_CARRIER] for the tortfeasor's available liability limits of $[____]. Before releasing the tortfeasor, the insured should comply with the policy's notice and consent-to-settle terms. Colorado applies notice-prejudice principles to UM/UIM consent-to-settle provisions. See Clementi v. Nationwide Mutual Fire Insurance Co., 16 P.3d 223 (Colo. 2001), and Lauric v. USAA Casualty Insurance Co., 209 P.3d 190 (Colo. App. 2009).

B. Consent to Settle / Substitution of Payment

Pursuant to the policy's cooperation and consent provisions, we request a written response regarding the proposed settlement by [__/__/____]. If the Carrier contends that additional information is required or that it intends to protect subrogation rights, it should identify its position and policy basis promptly.

No release will be executed until counsel completes the policy-specific consent and prejudice analysis. This request does not create an automatic statutory consent, waiver, or substitution deadline.

VII. UM/UIM POLICY LIMITS DEMAND

A. Calculation of UIM Benefits Due Under Section 10-4-609(1)(c)

Because our client's uncompensated loss of $[____] exceeds the available UM/UIM limits of $[____], this is a textbook policy limits case.

B. Formal Demand

Pursuant to C.R.S. section 10-4-609 and the terms of Policy No. [________________________________], our client hereby demands payment of the FULL UM/UIM policy limits of $[____] within [____] days of this letter.

VIII. NOTICE OF STATUTORY AND COMMON LAW BAD FAITH EXPOSURE

A. Colorado Recognizes Both Common Law and Statutory Bad Faith

Colorado recognizes separate common-law and statutory first-party bad-faith claims. The statutory claim has a less onerous liability standard than the common-law claim:

(1) Common Law Bad Faith — Travelers Ins. Co. v. Savio, 706 P.2d 1258 (Colo. 1985)

Under Savio, a first-party insured may sue the insurer in tort when the insurer acts unreasonably and knows or recklessly disregards that its conduct is unreasonable. Recoverable actual damages must be caused by the proven bad-faith conduct; exemplary damages require the separate proof and procedure in C.R.S. section 13-21-102.

(2) Statutory Bad Faith — C.R.S. sections 10-3-1115 and 10-3-1116 (2008)

In 2008 the Colorado General Assembly enacted C.R.S. sections 10-3-1115 and 10-3-1116, creating a statutory cause of action that requires only proof that the insurer "delayed or denied authorizing payment of a covered benefit without a reasonable basis for that action." C.R.S. section 10-3-1115(2). The knowing/reckless element of common law bad faith is not required. Kisselman v. American Family Mut. Ins. Co., 292 P.3d 964, 970-72 (Colo. App. 2011) (holding statutory bad faith standard "less onerous" than common law standard).

B. Available Remedies — The Colorado "Double Damages Plus Fees" Rule

Under C.R.S. section 10-3-1116(1), a first-party claimant whose covered benefit has been unreasonably delayed or denied is entitled to:

1. Two (2) times the covered benefit as the statutory award;
2. Reasonable attorney's fees;
3. Court costs; and
4. Any other relief independently authorized by applicable law.

Section 10-3-1116 supplies a statutory award of two times the covered benefit, plus reasonable attorney fees and court costs. A separate contract claim may seek the unpaid policy benefit itself. Counsel must plead and calculate separate claims without duplicating the same damages across remedies.

An insurer may not withhold an undisputed covered benefit merely because another component remains reasonably disputed. State Farm Mutual Automobile Insurance Co. v. Fisher, 2018 CO 39. Whether a noneconomic amount is undisputed remains evidence-specific. Fear v. GEICO Casualty Co., 2024 CO 77.

C. Exemplary Damages Under C.R.S. section 13-21-102

If supported by the evidence and permitted by the court, our client may seek exemplary damages under C.R.S. section 13-21-102. A claim generally may be added only after initial disclosures and prima facie proof of a triable issue. The ordinary ceiling is the amount of actual damages; the court may increase an award, up to three times actual damages, only under the specific pendency-of-case findings in subsection (3).

D. Any Delay Beyond This Demand Will Be Deemed Unreasonable

The Carrier should evaluate the claim using the information reasonably available at the time. A demand deadline does not by itself establish statutory or common-law bad faith; any later claim depends on the coverage, evidence, investigation, timing, and objective reasonableness of the Carrier's conduct.

IX. ARBITRATION / LITIGATION POSTURE

A. Policy Arbitration Clause

The subject policy [CONTAINS / DOES NOT CONTAIN] a UM/UIM arbitration clause. Counsel must analyze the clause's scope, enforceability, forum, deadlines, and potential preclusive effect. Colorado law does not support a categorical statement in this letter that every bad-faith issue is non-arbitrable.

B. Notice of Intent to Proceed

If the Carrier fails to tender the full UM/UIM limits by the deadline set forth herein, we will:

1. Demand arbitration under the policy (if applicable);
2. File suit in the District Court of [____] County, Colorado, seeking:
   - Breach of contract (UM/UIM benefits);
   - Common law bad faith under Savio;
   - Statutory bad faith under C.R.S. sections 10-3-1115 and 10-3-1116 (2x benefit plus fees);
   - Exemplary damages under C.R.S. section 13-21-102; and
3. File a regulatory complaint with the Colorado Division of Insurance.

X. RESPONSE DEADLINE

THIS DEMAND EXPIRES AT 5:00 P.M. MOUNTAIN TIME ON [__/__/____].

Failure to respond may lead our client to pursue available policy and judicial remedies, but the deadline alone does not establish an unreasonable denial or waive a legally supported defense.

XI. DOCUMENT PRESERVATION NOTICE

The Carrier is requested to preserve the entire claim file including (but not limited to): claim notes, activity logs, reserve history and changes, all internal and external correspondence, adjuster/supervisor approvals, underwriting file, policy file, claim handling manuals, audit reports, training materials, and all ESI related to Claim No. [________________________________]. Any preservation dispute or requested remedy is reserved for determination under the law and rules applicable when the issue arises.

XII. CONCLUSION

Colorado's UM/UIM statute supplies coverage for losses caused by uninsured or underinsured motorists within the statutory and policy framework described above. Our client paid premiums for this coverage. The Carrier now has an opportunity to evaluate the enclosed proof promptly and pay the benefits shown to be owed under the policy.

We look forward to prompt resolution.

Respectfully submitted,

[LAW_FIRM_NAME]

By: _______________________________
[ATTORNEY_NAME], Esq.
Colorado Reg. No. [________________________________]
[ADDRESS]
[CITY], CO [ZIP]
Telephone: [________________________________]
Email: [________________________________]

Counsel for [CLIENT_NAME]

ENCLOSURES:

• ☐ Policy declarations page and UM/UIM endorsement
• ☐ [________________________________] Police Department Traffic Crash Report
• ☐ Complete medical records and itemized bills
• ☐ Wage loss documentation
• ☐ Photographs of vehicles and injuries
• ☐ Expert reports (accident reconstruction / life care plan / vocational)
• ☐ Declaration of client as to non-economic loss

CC:

• [CLIENT_NAME]
• [TORTFEASOR_CARRIER] (re: consent to settle)

COLORADO UM/UIM QUICK REFERENCE

SOURCES AND REFERENCES

• Colorado General Assembly, 2025 C.R.S. titles download (current through the 2025 First Extraordinary Session): https://content.leg.colorado.gov/agencies/office-legislative-legal-services/2025-crs-titles-download
• Colorado General Assembly, 2026 Red Book (2026 amendments, additions, repeals, and effective dates): https://content.leg.colorado.gov/agencies/office-legislative-legal-services/red-book-2026
• Colorado General Assembly, S.B. 07-256 signed session law (current add-on and stacking framework): https://leg.colorado.gov/sites/default/files/images/olls/2007a_sl_413.pdf
• Colorado General Assembly, H.B. 24-1472 enacted bill page (current noneconomic-damages tier and effective date): https://leg.colorado.gov/bills/hb24-1472
• Progressive Direct Insurance Co. v. Ortiz, 2026 CO 40: https://www.coloradojudicial.gov/system/files/opinions-2026-06/24SC440.pdf
• Pham v. State Farm Automobile Insurance Co., 2013 CO 17: https://www.coloradojudicial.gov/sites/default/files/2024-05/10SC504.pdf
• State Farm Mutual Automobile Insurance Co. v. Fisher, 2018 CO 39: https://www.coloradojudicial.gov/sites/default/files/2024-05/15SC472.pdf
• Fear v. GEICO Casualty Co., 2024 CO 77: https://www.coloradojudicial.gov/system/files/opinions-2024-12/23SC333.pdf
• Colorado Judicial Branch, Civil Jury Instructions Chapter 9 (comparative negligence and pro-rata liability): https://www.coloradojudicial.gov/media/13553
• Colorado Judicial Branch, Civil Jury Instructions Chapter 25 (Bad Faith Breach of Insurance Contract): https://www.coloradojudicial.gov/media/19702
• Colorado Division of Insurance, File a Complaint: https://doi.colorado.gov/for-consumers/file-a-complaint