UM/UIM Demand Letter - Idaho

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Idaho

[LAW FIRM LETTERHEAD]

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION — FOR RESOLUTION PURPOSES ONLY
PROTECTED UNDER IDAHO RULE OF EVIDENCE 408 AND F.R.E. 408

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

Date: [__/__/____]

[INSURANCE COMPANY NAME]
[________________________________]
[________________________________]
[City], [State] [Zip]

Attention: [________________________________], Claims Adjuster
Re: FORMAL UM/UIM POLICY LIMITS DEMAND — IDAHO LAW
Insured/Claimant: [________________________________]
Policy Number: [________________________________]
Claim Number: [________________________________]
Date of Loss: [__/__/____]
UM/UIM Policy Limits: $[________________________________]
Tortfeasor: [________________________________]
Tortfeasor's Carrier: [________________________________]
Tortfeasor's Liability Limits: $[________________________________]
Demand Response Deadline: [__/__/____] at 5:00 p.m. Mountain Time

Dear [________________________________]:

I. INTRODUCTION AND NATURE OF DEMAND

This firm represents [________________________________] ("our client") in connection with a claim for [UNINSURED / UNDERINSURED] motorist benefits under Idaho law arising from a motor vehicle collision on [__/__/____] in [________________________________], Idaho. This letter constitutes a formal demand for payment of the full UM/UIM policy limits of $[________________________________] pursuant to Idaho Code § 41-2502 and applicable policy terms.

Our client's documented damages substantially exceed all available coverage. Idaho law mandates that every automobile liability policy issued in this state include UM/UIM coverage unless the named insured rejects it in writing using the form approved by the Idaho Department of Insurance (IDAPA 18.02.02). No such valid written rejection exists here.

Pursuant to Idaho Code § 41-1839(1), if [________________________________] ("the Company") fails to pay the amount justly due within sixty (60) days after this proof of loss pertaining to UM/UIM coverage benefits, our client will be entitled to court-adjudged reasonable attorney's fees in any subsequent action or arbitration.

II. IDAHO UM/UIM LAW — CONTROLLING AUTHORITY

A. Mandatory Coverage and Written Rejection Requirement

Idaho Code § 41-2502(1) requires that every owner's or operator's automobile liability insurance policy delivered or issued for delivery in Idaho include UM and UIM coverage in the minimum limits set forth in Idaho Code § 49-117 — currently $25,000 per person / $50,000 per accident for bodily injury — unless the named insured rejects coverage in writing.

Under Idaho Code § 41-2502(2), rejection must be in writing or in an electronic record as authorized by the Uniform Electronic Transactions Act (Idaho Code Title 28, Chapter 50). A valid written rejection binds all other insureds under the policy and eliminates the obligation to provide coverage on renewals or replacement policies issued by the same insurer or affiliate. Absent a valid rejection, UM/UIM coverage exists by operation of law.

Before issuance of any new policy or first renewal on or after January 1, 2009, the insurer must provide the IDOI-approved standard disclosure statement explaining UM/UIM coverage options, including the two UIM coverage types available in Idaho:

• "Difference in Limits" (Offset) UIM: Coverage limits are reduced by amounts recovered from the tortfeasor's liability insurer.
• "Excess" UIM: Coverage limits are added on top of amounts recovered from the tortfeasor's liability insurer.

See IDAPA 18.02.02 (Automobile Insurance Policies — UM/UIM Disclosure); IDOI Attachment B (UM/UIM Notice and Rejection Forms, revised 3/28/2023).

B. Attorney Fees Under Idaho Code § 41-1839

Idaho Code § 41-1839(1) provides that an insurer that fails to pay within sixty (60) days after proof of loss pertaining to UM/UIM coverage benefits shall be liable, in any subsequent action or arbitration, for such further amount as the court shall adjudge reasonable as attorney's fees. This is a mandatory fee-shifting provision — not a discretionary one — that applies whenever the insurer fails to pay what is justly due. See Weinstein v. Prudential Prop. & Cas. Ins. Co., 149 Idaho 299, 233 P.3d 1221 (2010).

This provision makes Idaho particularly favorable for policyholders: unlike states that require proof of bad faith to shift fees, Idaho's § 41-1839 triggers fee liability whenever the insurer simply fails to timely pay an amount justly owed.

C. Stacking Rules

Idaho Code § 41-2502 does not expressly prohibit stacking. Idaho courts permit stacking of UM/UIM limits across multiple vehicles or policies unless the insurer includes a clear and unambiguous anti-stacking clause in the policy. Gearhart v. Mut. of Enumclaw Ins. Co., 160 Idaho 664, 378 P.3d 454 (2016) (rejecting anti-stacking language that was confusing or ambiguous). Ambiguous or unclear anti-stacking provisions are construed against the insurer and in favor of coverage. Arreguin v. Farmers Ins. Co. of Idaho, 145 Idaho 459, 461, 180 P.3d 498, 500 (2008).

[IF STACKING APPLIES — SELECT AND COMPLETE:]

☐ Intrapolicy stacking applies: Our client's policy insures [____] vehicles, each carrying $[________________________________] in UM/UIM limits, for a stacked total of $[________________________________].

☐ Interpolicy stacking applies: Our client holds multiple policies with aggregate UM/UIM limits totaling $[________________________________].

☐ Anti-stacking clause challenged: The policy purports to restrict stacking, but the clause is ambiguous and unenforceable under Idaho law.

D. Modified Comparative Fault — Idaho Code § 6-801

Idaho follows modified comparative fault with a 50% bar. Idaho Code § 6-801. A plaintiff may recover damages only if their fault is less than 50%; recovery is reduced proportionally by the plaintiff's percentage of fault. Idaho applies the "individual rule" — each defendant's negligence is compared separately to the plaintiff's. Our client bears no comparative fault here, or their fault is minimal and does not approach the 50% threshold.

III. COVERAGE ANALYSIS

A. Policy Information

B. UM/UIM Coverage Trigger

☐ UNINSURED MOTORIST CLAIM — The tortfeasor qualifies as an "uninsured motorist" because:

☐ The tortfeasor had no liability insurance in force at the time of the collision
☐ The tortfeasor's insurer denied coverage
☐ The tortfeasor's insurer is insolvent or in liquidation
☐ The tortfeasor was a hit-and-run driver who cannot be identified (physical contact confirmed)
☐ The tortfeasor's limits are below Idaho's minimum requirements ($25,000/$50,000)

☐ UNDERINSURED MOTORIST CLAIM — The tortfeasor qualifies as an "underinsured motorist" because:

☐ The tortfeasor's liability limits of $[________________________________] are insufficient to compensate our client's damages of $[________________________________]
☐ Our client has exhausted or will exhaust the tortfeasor's policy limits of $[________________________________]
☐ Our client's damages exceed the tortfeasor's coverage by $[________________________________]

C. Consent to Settle / Preservation of UIM Rights

NOTICE: Before settling with the tortfeasor's liability carrier, our client requests written consent to settle from [________________________________]. Failure to respond within [____] days will be treated as consent. See Idaho policy terms governing consent to settle.

IV. THE COLLISION AND LIABILITY

A. Facts of the Collision

On [__/__/____], at approximately [____]:00 [a.m./p.m.], our client [________________________________] was [________________________________] at or near [________________________________], [City], Idaho.

[DETAILED NARRATIVE OF COLLISION — include road conditions, lighting, weather, relevant Idaho geography/road type:]

[________________________________]

B. Tortfeasor's Negligence Under Idaho Law

The tortfeasor, [________________________________], was negligent under Idaho common law and applicable statutes in the following respects:

☐ Failure to maintain proper lookout (Idaho Code § 49-631)
☐ Failure to yield right-of-way (Idaho Code § 49-801 et seq.)
☐ Following too closely (Idaho Code § 49-634)
☐ Excessive speed for conditions (Idaho Code § 49-654)
☐ Distracted/inattentive driving (Idaho Code § 49-1401A)
☐ Running a red light or stop sign (Idaho Code § 49-802)
☐ Improper lane change or failure to maintain lane (Idaho Code § 49-637)
☐ Driving under the influence of alcohol or drugs (Idaho Code § 18-8004)
☐ [________________________________]

C. Evidence of Liability

1. Police/Law Enforcement Report
[________________________________] (Agency) — Report No. [________________________________], dated [__/__/____]. The report documents: [________________________________].

2. Witness Statements
[____] independent witnesses observed the collision and have provided statements confirming tortfeasor fault. Witness contact information available upon request.

3. Physical Evidence
Point of impact analysis, vehicle damage patterns, skid marks, debris field, and scene photographs all confirm tortfeasor negligence.

4. Photographs and Video
☐ Scene photographs ☐ Dashcam/surveillance footage ☐ Aerial/overhead imagery

5. Expert Analysis
☐ Accident reconstructionist [________________________________] has opined: [________________________________]

D. Comparative Fault Analysis

Under Idaho Code § 6-801, our client's fault, if any, does not meet or exceed 50%. Our client:

[DESCRIBE CLIENT'S LAWFUL CONDUCT AND FREEDOM FROM FAULT:]

[________________________________]

V. OUR CLIENT'S INJURIES AND TREATMENT

A. Mechanism of Injury and Initial Presentation

As a direct and proximate result of this collision, our client sustained the following injuries diagnosed by treating physicians:

Primary Diagnoses:

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

Emergency Treatment:
Our client was [________________________________] and transported to [________________________________] Hospital/Emergency Department on [__/__/____].

B. Treatment Timeline

C. Current Condition and Prognosis

[DESCRIBE CURRENT SYMPTOMS, FUNCTIONAL LIMITATIONS, AND PROGNOSIS:]

[________________________________]

D. Permanent Impairment

☐ Permanent impairment has been assigned as follows:

VI. DAMAGES

A. Medical Expenses

Past Medical Expenses:

Future Medical Expenses (Present Value):

B. Lost Income and Earning Capacity

Past Lost Income:

Future Lost Earning Capacity:

Vocational expert [________________________________] has opined that our client's injuries have resulted in a reduction in future earning capacity of $[________________] per year. Present value of future lost earning capacity: $[________________].

C. Non-Economic Damages

Idaho does not cap non-economic damages in personal injury cases arising from motor vehicle accidents (note: Idaho Code § 6-1603 caps non-economic damages in medical malpractice actions, but that cap does not apply here). Our client's non-economic damages include:

Pain and Suffering: [DESCRIBE NATURE, FREQUENCY, AND SEVERITY OF PAIN:]
[________________________________]

Loss of Enjoyment of Life: [DESCRIBE ACTIVITIES CLIENT CAN NO LONGER PERFORM:]
[________________________________]

Emotional Distress: [DESCRIBE PSYCHOLOGICAL SEQUELAE:]
[________________________________]

Disability and Disfigurement:
☐ Permanent disability ☐ Disfigurement/scarring ☐ Ongoing functional limitation

Loss of Consortium (if applicable): [________________________________]

D. Total Damages Summary

VII. UIM BENEFIT CALCULATION

A. Offset/Difference in Limits Method (if Offset UIM policy):

B. Excess Method (if Excess UIM policy):

VIII. POLICY LIMITS DEMAND

Based on the foregoing, we hereby demand payment of the full UM/UIM policy limits of $[________________________________] on or before [__/__/____] at 5:00 p.m. Mountain Time.

Our client's total damages of $[________________________________] vastly exceed the combined available coverage. This is a clear policy limits case. No reasonable basis exists to deny or discount this claim.

IX. BAD FAITH AND ATTORNEY FEE WARNING

A. Idaho Code § 41-1839 — Mandatory Attorney Fees

As stated above, Idaho Code § 41-1839(1) requires the Company to pay our client's UM/UIM proof of loss within sixty (60) days of submission. This letter constitutes proof of loss. If the Company fails to pay the amount justly due within that period, it will be liable for court-adjudged reasonable attorney's fees in any subsequent action or arbitration — regardless of whether bad faith is separately established.

B. Idaho Common Law Bad Faith — White v. Unigard

Idaho recognizes a first-party bad faith tort, distinct from breach of contract, under which an insurer that unreasonably and intentionally fails to settle a valid claim of its own insured is liable in tort. White v. Unigard Mut. Ins. Co., 112 Idaho 94, 97, 730 P.2d 1014, 1017 (1986) (expressly recognizing "a tort action, distinct from an action on the contract, for an insurer's bad faith in settling the first party claims of its insured").

To establish first-party bad faith under Idaho law, our client must prove:

1. The insurer had no reasonable basis for denying or delaying payment of the claim;
2. The insurer knew or recklessly disregarded the lack of a reasonable basis; and
3. The insured suffered damages as a result.

See Weinstein v. Prudential Prop. & Cas. Ins. Co., 149 Idaho 299, 233 P.3d 1221 (2010) (affirming bad faith verdict and punitive damages against insurer for unreasonable delay and failure to investigate UM claim).

C. Idaho Unfair Claim Settlement Practices — Idaho Code § 41-1329

The Company's claim handling is subject to regulation under Idaho Code § 41-1329. The following practices, if committed intentionally or with such frequency as to indicate a general business practice, constitute unfair claims settlement practices:

• § 41-1329(2): Failing to acknowledge and act reasonably promptly upon communications
• § 41-1329(3): Failing to adopt and implement reasonable investigation standards
• § 41-1329(4): Refusing to pay claims without conducting a reasonable investigation
• § 41-1329(5): Failing to affirm or deny coverage within a reasonable time after proof of loss
• § 41-1329(6): Not attempting in good faith to effectuate prompt, fair, and equitable settlement when liability is reasonably clear
• § 41-1329(7): Compelling litigation by offering substantially less than amounts ultimately recovered
• § 41-1329(14): Failing to promptly provide a reasonable explanation for denial or inadequate offer

Note: Idaho courts have held that § 41-1329 does not create a private right of action; violations are enforced by the IDOI. White v. Unigard, 112 Idaho at 97. However, evidence of § 41-1329 violations is relevant to a common law bad faith claim.

D. Punitive Damages — Idaho Code § 6-1604

Under Idaho Code § 6-1604(1), punitive damages require proof by clear and convincing evidence of oppressive, fraudulent, malicious, or outrageous conduct by the insurer. Idaho Code § 6-1604(2) prohibits inclusion of a punitive damages prayer in the original complaint; a party must file a pretrial motion and obtain court approval to amend after demonstrating a reasonable likelihood of proving sufficient facts. See Idaho Supreme Court clarification in Boise Tower Assocs., LLC v. Hogland and subsequent 2024 decisions.

Punitive damages are capped at the greater of $250,000 or three times compensatory damages. Idaho Code § 6-1604(3). The jury is not informed of the cap.

If the Company's conduct rises to the level of oppressive, fraudulent, malicious, or outrageous behavior, we will seek leave to amend and pursue punitive damages accordingly.

X. ARBITRATION

A. Policy Arbitration Provision

The policy ☐ contains / ☐ does not contain an arbitration clause for UM/UIM disputes.

[IF ARBITRATION CLAUSE EXISTS — INSERT POLICY LANGUAGE:]

[________________________________]

B. Arbitration Demand (If Applicable)

If [________________________________] fails to accept this demand and the policy contains a binding arbitration clause, this letter serves as notice of our client's intent to invoke arbitration under Idaho law and the applicable policy terms. We will demand selection of a neutral arbitrator and proceed under Idaho Rules of Civil Procedure.

XI. DEMAND DEADLINE AND CONSEQUENCES OF NON-RESPONSE

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

Failure to accept this demand in full by the stated deadline will result in the following:

1. Filing of suit in the District Court of the [________________________________] Judicial District of Idaho for all UM/UIM benefits, consequential damages, bad faith tort damages, punitive damages (upon court approval), and attorney's fees under Idaho Code § 41-1839;

2. Demand for arbitration (if policy requires), with an accompanying request that the arbitrator award attorney's fees under § 41-1839;

3. Complaint filed with the Idaho Department of Insurance (IDOI), 700 W. State Street, P.O. Box 83720, Boise, ID 83720-0043, Telephone: (208) 334-4250 | Toll-Free: (800) 721-3272, for violations of Idaho Code § 41-1329 (Unfair Claim Settlement Practices);

4. Withdrawal of this demand — once suit is filed, our client reserves the right to seek the full measure of damages available under Idaho law without limitation to current demand amounts.

XII. DOCUMENT PRESERVATION NOTICE

This letter constitutes formal notice to [________________________________] to preserve all documents and electronically stored information related to this claim, including but not limited to: the complete claim file and all versions thereof; all adjuster notes, diaries, activity logs, and reserve documentation; all internal communications regarding this claim; all communications with the insured or claimant; all photographs, inspections, and expert reports; claims handling guidelines and training materials applicable to UM/UIM claims; and all supervisor approvals and quality assurance reviews. Failure to preserve such materials may result in spoliation sanctions.

XIII. CONCLUSION

This claim presents clear UM/UIM coverage, well-documented serious injuries, and total damages that substantially exceed the available policy limits. [________________________________] has a straightforward opportunity to resolve this claim by tendering its policy limits to its own insured, as Idaho law contemplates.

We urge prompt action. Please direct all responses to the undersigned.

Respectfully submitted,

[________________________________]

By: _______________________________________________
[________________________________], Attorney at Law
Idaho State Bar No. [________________]
[________________________________]
[City], ID [____]
Telephone: [________________________________]
Email: [________________________________]

Counsel for [________________________________]

ENCLOSURES:

☐ Policy declarations page and UM/UIM coverage provisions
☐ IDOI UM/UIM rejection form (or confirmation no rejection on file)
☐ Police/law enforcement crash report
☐ Medical records and itemized bills
☐ Photographs of scene, vehicles, and injuries
☐ Wage/income loss documentation
☐ Vocational and/or life care plan expert report
☐ Accident reconstruction report (if applicable)

CC:
☐ [________________________________] (Client)
☐ [________________________________] (Tortfeasor's Liability Carrier — re: consent to settle)

IDAHO UM/UIM QUICK REFERENCE

SOURCES AND REFERENCES

• Idaho Code § 41-2502: https://legislature.idaho.gov/statutesrules/idstat/title41/t41ch25/sect41-2502/
• Idaho Code § 41-1839: https://legislature.idaho.gov/statutesrules/idstat/title41/t41ch18/sect41-1839/
• Idaho Code § 41-1329: https://legislature.idaho.gov/statutesrules/idstat/title41/t41ch13/sect41-1329/
• Idaho Code § 6-801 (comparative fault): https://legislature.idaho.gov/statutesrules/idstat/title6/t6ch8/
• Idaho Code § 6-1604 (punitive damages): https://legislature.idaho.gov/statutesrules/idstat/title6/t6ch16/sect6-1604/
• IDAPA 18.02.02 UM/UIM Disclosure Forms: https://doi.idaho.gov/wp-content/uploads/info/rules/18.02.02.pdf
• White v. Unigard Mut. Ins. Co., 112 Idaho 94, 730 P.2d 1014 (1986)
• Weinstein v. Prudential Prop. & Cas. Ins. Co., 149 Idaho 299, 233 P.3d 1221 (2010)
• Gearhart v. Mut. of Enumclaw Ins. Co., 160 Idaho 664, 378 P.3d 454 (2016)
• Arreguin v. Farmers Ins. Co. of Idaho, 145 Idaho 459, 180 P.3d 498 (2008)
• Idaho Department of Insurance: https://doi.idaho.gov