UM/UIM Demand Letter - Kansas

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Kansas

[LAW FIRM LETTERHEAD]

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION — FOR RESOLUTION PURPOSES ONLY
PROTECTED UNDER K.R.E. 408 AND F.R.E. 408

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

Date: [__/__/____]

[INSURANCE_COMPANY_NAME]
[________________________________]
[________________________________]
[________________________________] KS [________]

Attention: [________________________________], [________________________________]
Re: UM/UIM POLICY LIMITS DEMAND — KANSAS LAW
Insured/Claimant: [________________________________]
Policy Number: [________________________________]
Claim Number: [________________________________]
Date of Loss: [__/__/____]
UM/UIM Policy Limits: $[________________] per person / $[________________] per accident
Tortfeasor: [________________________________]
Tortfeasor's Carrier: [________________________________]
Tortfeasor's Limits: $[________________] per person / $[________________] per accident
Response Deadline: [__/__/____] at 5:00 p.m. Central Time

Dear [________________________________]:

I. INTRODUCTION AND NATURE OF DEMAND

This firm represents [________________________________] ("our client") in connection with a claim for [UNINSURED / UNDERINSURED] motorist benefits under Kansas law arising from a motor vehicle collision on [__/__/____]. This letter constitutes a formal demand for payment of the full UM/UIM policy limits of $[________________].

Kansas requires every automobile liability policy to include UM/UIM coverage under K.S.A. § 40-284. That statute exists precisely to protect insureds when the negligent driver carries no insurance or insufficient insurance to compensate the victim. Our client paid premiums for this protection. [________________________________] ("the Company") must now honor it.

Our client's damages vastly exceed all available liability coverage. This is a clear policy-limits demand.

II. KANSAS UM/UIM LAW — CONTROLLING FRAMEWORK

A. Mandatory UM/UIM Coverage (K.S.A. § 40-284)

Under K.S.A. § 40-284(a), every automobile liability insurance policy delivered or issued for delivery in Kansas must provide uninsured motorist coverage. The minimum required limits are $25,000 per person / $50,000 per accident (matching the minimum liability limits required under K.S.A. § 40-3107). Critically:

1. Add-On UIM Structure: Kansas uses an add-on (not a setoff) UIM structure. Under K.S.A. § 40-284(b), UIM coverage pays the amount by which the insured's damages exceed the tortfeasor's liability limits — up to the UIM policy limits — not merely the difference between the UIM limits and the tortfeasor's limits.

2. Anti-Stacking: K.S.A. § 40-284(d) prohibits stacking of UM/UIM coverage across multiple vehicles on the same policy unless the insured purchased separate, unaffiliated policies. An insurer may include an anti-stacking provision in its policy.

3. Rejection Must Be Written and Knowing: The named insured may reject UM/UIM coverage in excess of the statutory minimum only in writing. A rejection by the named insured binds all parties insured under the policy. K.S.A. § 40-284(c).

4. Consent-to-Settle / Subrogation Notice: Before settling with the tortfeasor's liability carrier for policy limits, the insured must provide the UIM carrier written notice by certified mail including documentation of pecuniary losses (all medical bills and authorization to obtain employer/medical records). The UIM carrier then has 60 days to substitute its payment for the settlement amount and preserve its subrogation rights. K.S.A. § 40-284(f).

B. Kansas No-Fault / PIP Interaction (K.S.A. § 40-3107)

Kansas is a mandatory PIP (personal injury protection) no-fault state under the Kansas Automobile Injury Reparations Act (K.A.I.R.A.), K.S.A. §§ 40-3101 to 40-3121. Every motor vehicle policy must provide minimum PIP benefits of:

• Medical benefits: $4,500 per person
• Wage loss benefits: 85% of monthly income, up to $900/month for up to 12 months ($10,800 maximum)
• Rehabilitation benefits: up to $4,500
• Funeral benefits: up to $2,000
• Survivors' benefits: up to $900/month

PIP benefits are primary and are payable regardless of fault. Our client has pursued and/or exhausted PIP benefits as applicable. PIP payments may reduce the net UIM demand only to the extent required by the policy or applicable offset provisions.

C. Tort Threshold (K.S.A. § 40-3117)

Because Kansas is a no-fault state, a claimant may recover non-economic damages (pain and suffering, mental anguish, inconvenience) in a tort action only if the injury:

☐ Required medical treatment with a reasonable value of $2,000 or more; OR
☐ Resulted in permanent disfigurement; OR
☐ Involved a fracture to a weight-bearing bone; OR
☐ Involved a compound, comminuted, displaced, or compressed fracture; OR
☐ Resulted in loss of a body member; OR
☐ Resulted in permanent injury within reasonable medical probability; OR
☐ Resulted in permanent loss of a bodily function; OR
☐ Caused death

Our client's injuries satisfy the threshold because: [________________________________].

D. Modified Comparative Fault (K.S.A. § 60-258a)

Kansas applies a modified comparative fault system with a 50% bar rule. A plaintiff may recover only if his or her fault is less than the combined fault of all defendants. Recovery is reduced proportionally by the plaintiff's percentage of fault. Our client bears no comparative fault, or at most minimal fault of [____]%, which does not approach the statutory bar.

E. Statute of Limitations

• Contract claim (UM/UIM policy benefits): 5 years from accrual under K.S.A. § 60-511
• Tort claim against the tortfeasor: 2 years under K.S.A. § 60-513

The date of loss was [__/__/____]. The applicable deadlines are being tracked and preserved.

III. COVERAGE ANALYSIS

A. Policy Details

B. Coverage Trigger

For Uninsured Motorist (UM) Claims — check all that apply:

☐ The tortfeasor carried no liability insurance at the time of the collision
☐ The tortfeasor's insurer denied coverage for the claim
☐ The tortfeasor's insurer is insolvent
☐ The tortfeasor was a hit-and-run driver who cannot be identified
☐ The tortfeasor's liability limits are less than the K.S.A. § 40-3107 minimum of $25,000/$50,000

For Underinsured Motorist (UIM) Claims:

The tortfeasor qualifies as an "underinsured motorist" because:

☐ The tortfeasor's liability limits of $[________________] are insufficient to compensate our client for damages exceeding $[________________]
☐ Our client has exhausted or is in the process of exhausting the tortfeasor's liability limits
☐ The tortfeasor's net liability coverage (after applicable setoffs) is less than our client's UIM limits

IV. THE COLLISION AND LIABILITY

A. Facts of the Collision

On [__/__/____], at approximately [________] a.m./p.m. Central Time, our client was [________________________________] at or near [________________________________], [________________________________] County, Kansas.

[________________________________]

[________________________________]

B. Tortfeasor's Negligence Under Kansas Law

The tortfeasor, [________________________________], was negligent under Kansas common law and/or applicable traffic statutes in the following respects:

☐ Failure to maintain proper lookout — K.S.A. § 8-1514
☐ Failure to yield right-of-way — K.S.A. § 8-1514 et seq.
☐ Following too closely — K.S.A. § 8-1523
☐ Excessive speed / speeding — K.S.A. § 8-1558
☐ Distracted driving (cell phone) — K.S.A. § 8-15,111
☐ Running red light or stop sign — K.S.A. § 8-1508 / § 8-1530
☐ Improper lane change — K.S.A. § 8-1522
☐ Driving under the influence of alcohol or drugs — K.S.A. § 8-1567
☐ [________________________________]

C. Evidence of Liability

1. Police/Crash Report
[________________________________] Department/Kansas Highway Patrol Traffic Crash Report (Report No. [________________________________], dated [__/__/____])

2. Witness Statements
[____] independent witness(es) observed the collision: [________________________________]

3. Physical Evidence
Point of impact, vehicle damage patterns, debris field, and skid marks establish liability.

4. Photographs and Video
[________________________________]

5. Expert Analysis
☐ [________________________________], accident reconstructionist, has concluded: [________________________________]

D. Our Client's Comparative Fault

Under K.S.A. § 60-258a, our client bears no comparative fault for this collision. The evidence shows: [________________________________].

V. OUR CLIENT'S INJURIES AND TREATMENT

A. Injury Summary

As a direct and proximate result of this collision, our client sustained the following injuries, satisfying the K.S.A. § 40-3117 tort threshold:

Primary Diagnoses:

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

B. Treatment Timeline

C. Current Condition and Prognosis

[________________________________]

D. Permanent Impairment (if applicable)

VI. DAMAGES

A. PIP Benefits Already Received/Exhausted

B. Past Medical Expenses (In Excess of PIP)

C. Future Medical Expenses (Present Value)

D. Lost Income / Wage Loss (In Excess of PIP)

E. Non-Economic Damages (K.S.A. § 40-3117 threshold satisfied)

Pain and Suffering: [________________________________]

Mental Anguish and Emotional Distress: [________________________________]

Loss of Enjoyment of Life: [________________________________]

Permanent Impairment / Disfigurement: [________________________________]

Non-Economic Damages Claimed: $[________________]

Note: The Kansas non-economic damages cap under K.S.A. § 60-19a02 was struck down as unconstitutional by the Kansas Supreme Court in Hilburn v. Enerpipe Ltd., 309 Kan. 372 (2019). No statutory cap applies to non-economic damages in this case.

F. Damages Summary

VII. TORTFEASOR SETTLEMENT AND CONSENT-TO-SETTLE NOTICE

A. Settlement Status

☐ We have reached a settlement with the tortfeasor's liability carrier, [________________________________], for the tortfeasor's policy limits of $[________________].

☐ We are pursuing a settlement with the tortfeasor's liability carrier and will provide separate notice upon execution.

B. Certified Notice Under K.S.A. § 40-284(f)

FORMAL NOTICE OF TENTATIVE SETTLEMENT WITH TORTFEASOR

Pursuant to K.S.A. § 40-284(f), this letter (and the attached documentation) constitutes formal written notice, sent by certified mail, of the tentative agreement to settle with the underinsured tortfeasor for liability limits of $[________________]. Attached hereto are:

☐ Copies of all medical bills documenting pecuniary losses
☐ Written authorization to obtain records from all employers and medical providers

The Company has 60 days from receipt of this notice to substitute its payment for the settlement amount if it wishes to preserve its subrogation rights against the tortfeasor. K.S.A. § 40-284(f). Failure to substitute within 60 days constitutes a waiver of subrogation rights.

Please confirm in writing within [____] days whether the Company intends to consent to the settlement or substitute its payment.

VIII. CALCULATION OF UIM BENEFITS DUE

Under Kansas's add-on UIM structure (K.S.A. § 40-284(b)), UIM benefits pay the amount by which our client's total damages exceed the tortfeasor's available liability limits, up to our client's UIM policy limits:

Policy Limits Demand

We hereby demand payment of the full UIM policy limits of $[________________].

Our client's total damages of $[________________] exceed all available coverage. Pursuant to K.S.A. § 40-284, the Company owes its insured the full UIM limits of $[________________].

IX. BAD FAITH AND STATUTORY VIOLATIONS

A. K.S.A. § 40-2404 — Unfair Claims Settlement Practices

The Kansas Unfair Claims Settlement Practices Act prohibits an insurer from engaging in any of the following with such frequency as to constitute a general business practice, and prohibits individual violations as well:

• Misrepresenting pertinent facts or policy provisions
• Failing to acknowledge and act reasonably promptly upon communications
• Failing to adopt reasonable investigation standards
• Refusing to pay without a reasonable investigation
• Failing to effectuate prompt, fair, and equitable settlements when liability is reasonably clear
• Compelling insureds to litigate by offering substantially less than amounts owed
• Failing to provide a reasonable explanation for denial or reduction

B. Attorney Fees Under K.S.A. § 40-256

If the Company refuses to pay the full amount owed without just cause or excuse, the court shall award attorney fees to our client. K.S.A. § 40-256 applies where refusal to pay was vexatious or without reasonable grounds. The presence of no bona fide, reasonable factual basis for contesting this claim will support such an award.

C. Kansas Bad Faith Standard (Third-Party Context)

Under Glenn v. Fleming, 247 Kan. 296, 799 P.2d 79 (1990), an insurer that fails to act in good faith and without negligence in evaluating and settling a claim against its insured can be liable for amounts in excess of policy limits. This principle, while arising in the third-party context, informs the Company's obligations in evaluating its own insured's UM/UIM claim.

D. Spencer v. Aetna — No Independent First-Party Bad Faith Tort

Pursuant to Spencer v. Aetna Life & Casualty Ins. Co., 227 Kan. 914, 611 P.2d 149 (1980), Kansas does not recognize an independent tort action for first-party bad faith. However, the statutory remedies under K.S.A. §§ 40-256, 40-2404, and 40-3111 (for unreasonable PIP delays) remain fully available.

Any attempt to deny, delay, or undervalue this claim without reasonable justification will result in pursuit of all available statutory remedies including attorney fees under K.S.A. § 40-256.

X. ARBITRATION CONSIDERATIONS

A. Policy Arbitration Clause

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

[If applicable: Quote the arbitration clause verbatim and describe demand procedures.]

B. Arbitration Demand

If the Company fails to accept this demand, this letter serves as notice of our intent to invoke arbitration (if required by the policy) or to file suit in the District Court of [________________________________] County, Kansas, pursuant to the applicable statute of limitations under K.S.A. § 60-511 (5 years for contract claims).

XI. RESPONSE DEADLINE

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

Consequences of Non-Response

If the Company fails to accept this demand by the stated deadline:

1. We will invoke arbitration (if required by policy) or file suit in Kansas District Court
2. We will seek attorney fees under K.S.A. § 40-256 for vexatious/without-just-cause refusal
3. We will file a complaint with the Kansas Insurance Department (KID), 1300 SW Arrowhead Road, Topeka, KS 66604-4001 (phone: 785-296-3071)
4. We will seek all statutory penalties under K.S.A. § 40-2404
5. The Company's conduct will be documented for use in subsequent bad faith/attorney fee proceedings

XII. CONCLUSION

This claim presents clear tortfeasor negligence, injuries satisfying the K.S.A. § 40-3117 threshold, and damages far exceeding all available coverage. The Company has an opportunity to fulfill its contractual obligation to its own insured by paying the UM/UIM policy limits of $[________________].

We urge prompt and fair resolution of this matter.

Respectfully submitted,

[________________________________]

By: _______________________________
[________________________________]
Kansas Bar No.: [________________]
[________________________________]
[________________________________], KS [________]
Tel.: [________________________________]
Fax: [________________________________]
Email: [________________________________]

Counsel for [________________________________]

ENCLOSURES:

• Policy declarations page
• UM/UIM endorsement and policy provisions
• Police/KHP crash report
• Medical records and itemized bills
• PIP payment history and exhaustion documentation
• Photographs of vehicles and scene
• Wage loss documentation
• Expert reports (if applicable)
• Written authorization for records (per K.S.A. § 40-284(f))

CC:

• [________________________________] (Client)
• [________________________________] (Tortfeasor's Carrier — consent to settle notice)
• Kansas Insurance Department, 1300 SW Arrowhead Road, Topeka, KS 66604-4001

KANSAS UM/UIM QUICK REFERENCE

SOURCES AND REFERENCES

• K.S.A. § 40-284: https://ksrevisor.gov/statutes/chapters/ch40/040_002_0084.html
• K.S.A. § 40-3107: https://ksrevisor.gov/statutes/chapters/ch40/040_031_0007.html
• K.S.A. § 40-3117: https://ksrevisor.gov/statutes/chapters/ch40/040_031_0017.html
• K.S.A. § 40-256: https://ksrevisor.gov/statutes/chapters/ch40/040_002_0056.html
• K.S.A. § 40-2404: https://ksrevisor.gov/statutes/chapters/ch40/040_002_0404.html
• K.S.A. § 60-258a: https://www.ksrevisor.gov/statutes/chapters/ch60/060_002_0058a.html
• K.S.A. § 60-511 (5-year contract SOL): https://law.justia.com/codes/kansas/chapter-60/article-5/section-60-511/
• K.S.A. § 60-513 (2-year tort SOL): https://ksrevisor.gov/statutes/chapters/ch60/060_005_0013.html
• Glenn v. Fleming, 247 Kan. 296, 799 P.2d 79 (1990): https://law.justia.com/cases/kansas/supreme-court/1990/63-536.html
• Spencer v. Aetna Life & Casualty Ins. Co., 227 Kan. 914, 611 P.2d 149 (1980)
• Hilburn v. Enerpipe Ltd., 309 Kan. 372 (2019) (non-economic damages cap unconstitutional)
• Kansas Insurance Department: https://insurance.ks.gov
• Kansas Automobile Injury Reparations Act overview: https://bullattorneys.com/blogs/auto-insurance-coverage-and-the-kansas-motor-injury-reparations-act/
• K.S.A. § 40-284 stacking analysis: https://kansascityinjuryfirm.com/underinsured-motorist-insurance-uim-stacking-in-missouri-kansas/