UM/UIM Demand Letter - Maine

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Maine

[LAW FIRM LETTERHEAD]

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

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

Date: [__/__/____]

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

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

Dear [________________________________]:

I. INTRODUCTION AND NATURE OF DEMAND

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

Maine law imposes one of the highest mandatory UM/UIM minimum coverage requirements in the nation — $50,000 per person / $100,000 per accident under 24-A M.R.S.A. § 2902 and 29-A M.R.S.A. § 1605(1) — precisely because the Legislature recognized that insureds need robust protection when they are injured by uninsured or underinsured motorists. Our client's damages far exceed the available coverage, and [CARRIER SHORT NAME] (the "Company") is obligated to fulfill the promise it made when it sold this policy.

II. MAINE UM/UIM LAW — GOVERNING FRAMEWORK

A. Mandatory UM/UIM Coverage Requirements

Under 24-A M.R.S.A. § 2902(1), no motor vehicle liability policy may be delivered or issued for delivery in Maine unless it includes UM/UIM coverage protecting persons insured under the policy who are legally entitled to recover damages from owners or operators of uninsured, underinsured, or hit-and-run motor vehicles for bodily injury, sickness, disease, or death.

Minimum Limits: Pursuant to 24-A M.R.S.A. § 2902(2) and 29-A M.R.S.A. § 1605(1), UM/UIM coverage must be provided in an amount not less than $50,000 per person / $100,000 per accident — the same limits as the mandatory bodily injury liability minimums. Maine is among the highest in the nation in this regard.

Equal-Limits Requirement: Under 24-A M.R.S.A. § 2902(2), for policies subject to the Maine Automobile Insurance Cancellation Control Act and assigned risk plan policies, the UM coverage must equal the liability coverage selected by the purchaser unless the purchaser expressly rejects equal coverage in a signed, dated writing containing the specific statutory rejection language. An oral or informal rejection is not effective.

Stacking Permitted: Maine permits stacking of UM/UIM policies. An insured may stack the policy insuring the vehicle in which they were riding or driving plus the policies of resident relatives. See 24-A M.R.S.A. § 2902; Fales Law, Maine UM Stacking Analysis (2024).

B. Definition of Underinsured Motor Vehicle

Under 24-A M.R.S.A. § 2902(1), an "underinsured motor vehicle" means a vehicle for which coverage is provided, but in amounts less than the minimum limits for bodily injury liability insurance under 29-A M.R.S.A. § 1605(1), or less than the limits of the injured party's own uninsured vehicle coverage.

C. UIM Offset Calculation Under Maine Law

Pursuant to 24-A M.R.S.A. § 2902(4) and (6), the amount of UIM coverage available is reduced by payments actually received from the tortfeasor's liability coverage. The offset is applied per the specific policy language and applicable subsection. Where a policy contains both per-person and per-accident limits, the per-person UIM coverage available is reduced by amounts actually paid to that person from the tortfeasor's coverage. See Cobb analysis, Berman & Simmons (2022).

D. Coverage Policy Details

E. Coverage Trigger

☐ Uninsured Motorist (UM) Claim — The tortfeasor qualifies as an "uninsured motorist" because:

☐ The tortfeasor carried no liability insurance at the time of the collision
☐ The tortfeasor's insurer has disclaimed or denied coverage
☐ The tortfeasor's insurer is insolvent (24-A M.R.S.A. § 2902(3))
☐ The tortfeasor was a hit-and-run operator who cannot be identified
☐ The tortfeasor's insurance limits are below Maine's mandatory minimums

☐ Underinsured Motorist (UIM) Claim — The tortfeasor qualifies as an "underinsured motorist" because:

☐ The tortfeasor's liability limits of $[________________________________] are insufficient to fully compensate our client
☐ Our client has exhausted / will exhaust the tortfeasor's policy limits upon settlement
☐ Our client's damages exceed all available third-party coverage

III. THE COLLISION AND LIABILITY

A. Facts of the Collision

On [__/__/____], at approximately [____] [a.m./p.m.], our client was [________________________________] at or near [________________________________], in [________________________________] County, Maine.

[DETAILED NARRATIVE OF COLLISION — include road conditions, weather, direction of travel, mechanism of impact]

B. Tortfeasor's Negligence Under Maine Law

The tortfeasor, [________________________________], was negligent under Maine law in one or more of the following respects:

☐ Failure to maintain a proper lookout — 29-A M.R.S.A. § 2051
☐ Failure to yield the right-of-way — 29-A M.R.S.A. § 2054
☐ Following too closely — 29-A M.R.S.A. § 2066
☐ Excessive speed for conditions — 29-A M.R.S.A. § 2074
☐ Distracted / texting while driving — 29-A M.R.S.A. § 2119
☐ Running a red light or stop sign — 29-A M.R.S.A. § 2057
☐ Improper lane change — 29-A M.R.S.A. § 2063
☐ Operating under the influence of alcohol or drugs — 29-A M.R.S.A. § 2411
☐ Failure to maintain control of vehicle
☐ [________________________________]

C. Evidence of Liability

1. Police / Crash Report
[________________________________] (Agency), Crash Report No. [________________________________], dated [__/__/____], finding [________________________________].

2. Witness Statements
[____] independent witnesses observed the collision and corroborate our client's account.

3. Physical Evidence
Point of impact, vehicle damage profiles, tire marks, and debris field are consistent with our client's version of events.

4. Electronic / Recorded Evidence
[________________________________] (dash cam footage / surveillance video / EDR data)

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

D. Comparative Fault Analysis Under Maine Law

Maine applies modified comparative negligence under 14 M.R.S.A. § 156. A claimant's recovery is barred only if the claimant is found equally at fault (50% or more). The jury reduces damages by dollars and cents — not by percentage — to the extent it deems just and equitable.

Our client bears zero comparative fault for this collision. [OR: Our client's comparative fault, if any, is minimal and well below the 50% bar. Under Maine's modified comparative fault system, our client's recovery is not defeated.]

IV. OUR CLIENT'S INJURIES AND MEDICAL TREATMENT

A. Injury Summary

As a direct and proximate result of the collision, our client sustained the following injuries:

Primary Injuries:

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

Secondary / Consequential Injuries:

• [________________________________]

B. Treatment Timeline

C. Current Condition and Prognosis

[DESCRIBE CURRENT CONDITION, FUNCTIONAL LIMITATIONS, AND PROGNOSIS]

D. Permanent Impairment

Per evaluation by [________________________________], M.D., dated [__/__/____].

V. DAMAGES

A. Past Medical Expenses

B. Future Medical Expenses (Present Value)

Per life care plan prepared by [________________________________], dated [__/__/____].

C. Lost Income and Earning Capacity

Past Lost Income: $[________________________________]
Documented by employer verification / tax records for the period [__/__/____] through [__/__/____].

Future Lost Earning Capacity (Present Value): $[________________________________]
Per vocational / economic analysis by [________________________________], dated [__/__/____].

D. Non-Economic Damages — Pain, Suffering, and Loss of Enjoyment of Life

Maine imposes no statutory cap on non-economic damages in personal injury cases. Our client has endured and will continue to endure:

• Severe and chronic pain requiring [________________________________]
• Loss of ability to engage in [________________________________] (prior activities)
• Disruption of family, social, and occupational life
• Emotional distress, anxiety, and depression attributable to the injuries
• Diminished quality of life for an estimated [____] years of remaining life expectancy

Non-Economic Damages Claimed: $[________________________________]

E. Damages Summary

VI. THIRD-PARTY SETTLEMENT AND CONSENT TO SETTLE

A. Settlement Status with Tortfeasor's Carrier

We [have reached / are pursuing] a settlement with the tortfeasor's liability carrier, [________________________________], for the tortfeasor's policy limits of $[________________________________]. [OR: The tortfeasor was uninsured / the tortfeasor's carrier has disclaimed coverage.]

B. Request for Consent to Settle / Waiver of Subrogation

IMPORTANT NOTICE TO [CARRIER SHORT NAME]: Pursuant to Maine law and the terms of the policy, we hereby formally request the Company's written consent to settle with the tortfeasor's carrier for the available liability limits.

Under Maine law, [CARRIER SHORT NAME] retains subrogation rights against the tortfeasor that may be prejudiced if it unreasonably withholds consent. See Emery Waterhouse Co. v. Lea, 467 A.2d 986 (Me. 1983).

Please provide written consent or written objection within [____] calendar days.

Failure to respond will be treated as consent to settle.

VII. CALCULATION OF UM/UIM BENEFITS AND DEMAND

A. UIM Benefits Calculation

Note: Per 24-A M.R.S.A. § 2902(6)(A), the UIM benefits available to our client are determined by subtracting the actual payment received from the tortfeasor's coverage from our client's per-person UIM limit, reduced further by the excess of the tortfeasor's bodily injury coverage over all payments made to all injured persons.

B. Stacking Analysis (If Applicable)

C. Policy Limits Demand

We hereby demand payment of the full UM/UIM policy limits of $[________________________________].

Our client's total damages of $[________________________________] vastly exceed the combined coverage available from all sources. This is a clear policy limits case. The Company has an opportunity — and an obligation — to pay the full UM/UIM limits to its own insured.

VIII. STATUTORY RIGHTS, INTEREST, AND ATTORNEY FEES

A. Overdue Payment Interest — 24-A M.R.S.A. § 2436

Under 24-A M.R.S.A. § 2436(1) and (3), an undisputed insurance claim is payable within 30 days of proof of loss and ascertainment of the loss. If the Company fails to pay an undisputed claim when due, the overdue amount bears interest at 1.5% per month from the due date.

B. Attorney Fees — 24-A M.R.S.A. § 2436(4)

Under 24-A M.R.S.A. § 2436(4), if overdue benefits are recovered in an action or paid after the Company receives notice of attorney representation, the Company must pay a reasonable attorney fee for advising and representing the claimant.

C. Unfair Claims Settlement Practices — 24-A M.R.S.A. § 2436-A

Under 24-A M.R.S.A. § 2436-A(1), our client has a private right of action against the Company if it commits any of the following acts:

☐ Knowingly misrepresenting pertinent facts or policy provisions relating to coverage at issue (§ 2436-A(1)(A))
☐ Failing to acknowledge and review the claim within a reasonable time following receipt of written notice (§ 2436-A(1)(B))
☐ Threatening to appeal an arbitration award for the sole purpose of compelling a lower settlement (§ 2436-A(1)(C))
☐ Failing to affirm or deny coverage within a reasonable time after completing its investigation (§ 2436-A(1)(D))
☐ Without just cause, failing to effectuate a prompt, fair, and equitable settlement where liability has become reasonably clear (§ 2436-A(1)(E))

A successful § 2436-A claim entitles our client to damages, costs and disbursements, reasonable attorney fees, and interest at 1.5% per month on damages.

IX. BAD FAITH WARNING — DUTY OF GOOD FAITH AND FAIR DEALING

[CARRIER SHORT NAME], as our client's own insurer, owes a duty to act in good faith and deal fairly with its insured in every aspect of this claim. This duty arises at the time the parties enter into the insurance contract and exists regardless of whether a third-party tort claimant is involved. Marquis v. Farm Family Mut. Ins. Co., 628 A.2d 644, 648 (Me. 1993); Chiapetta v. Lumbermens Mut. Ins. Co., 583 A.2d 198, 202 (Me. 1990).

Maine Bad Faith Framework:

Maine does not recognize an independent tort of bad faith separate from contract. Marquis, 628 A.2d at 652. However, an insured who proves breach of the implied covenant of good faith and fair dealing may recover full consequential damages for breach of contract, which in Marquis included lost profits far exceeding policy limits ($680,000 on a $77,000 combined policy). The insurer's conduct in Marquis — conducting a bad faith investigation, failing to interview exculpatory witnesses, and withholding relevant information from the fire investigator — is directly analogous to the wrongful delay and undervaluation tactics employed here.

Additionally, our client has a private cause of action under 24-A M.R.S.A. § 2436-A for the specific unfair practices enumerated therein, entitling our client to damages, attorney fees, and 1.5% monthly interest.

Maine Unfair Trade Practices Act: Under 5 M.R.S.A. § 207 and § 213, unfair or deceptive acts or practices in the conduct of any trade or commerce — including insurance — are unlawful. A purchaser who suffers loss of money or property as a result may maintain a private action under the UTPA. Curtis v. Allstate Ins. Co., 2002 ME 9, ¶ 38, 787 A.2d 760.

Punitive Damages: Under Maine law, punitive damages require proof of malice — actual ill will toward the plaintiff or conduct so outrageous that malice is implied — established by clear and convincing evidence. Tuttle v. Raymond, 494 A.2d 1353, 1360–64 (Me. 1985). There is no statutory cap on punitive damages, though courts apply constitutional proportionality principles. Should the Company engage in conduct meeting this standard, our client will seek punitive damages without limitation.

Any attempt to unreasonably deny, delay, or undervalue this claim — a claim presented by the Company's own insured — will be met with the full range of available legal remedies.

X. ARBITRATION CONSIDERATIONS

A. Policy Arbitration Provision

The policy [CONTAINS / DOES NOT CONTAIN] an arbitration clause for UM/UIM disputes. [IF APPLICABLE: The policy provides: "[________________________________]." Maine courts generally enforce contractual arbitration clauses in insurance policies.]

B. Arbitration Demand (If Applicable)

If [CARRIER SHORT NAME] fails to accept this demand or fails to engage in good-faith negotiations, please treat this letter as notice of our client's intent to invoke arbitration under the policy and Maine law.

C. Litigation Venue

Should this matter proceed to litigation, our client intends to file suit in the Superior Court, [________________________________] County, Maine, and will seek all damages, statutory interest, attorney fees, and costs available under Maine law.

XI. RESPONSE DEADLINE AND CONSEQUENCES

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

Consequences of Failure to Accept This Demand

If [CARRIER SHORT NAME] fails to accept this demand in full by the stated deadline:

1. Litigation will be filed in Maine Superior Court seeking all contract damages, consequential damages, statutory interest at 1.5% per month, and reasonable attorney fees under 24-A M.R.S.A. §§ 2436 and 2436-A.

2. Bad faith / § 2436-A claims will be pursued to the fullest extent allowed by Maine law, including recovery of all damages proximately caused by the Company's breach of its duty of good faith and fair dealing.

3. A complaint will be filed with the Maine Bureau of Insurance (MBI), 34 State House Station, Augusta, ME 04333-0034, Tel: (207) 624-8475, documenting the Company's violation of 24-A M.R.S.A. §§ 2164-D and 2436-A.

4. This settlement demand will be withdrawn, and our client will seek all available damages without limitation by this offer.

XII. DOCUMENT PRESERVATION NOTICE

This letter constitutes formal notice to preserve all documents, electronically stored information (ESI), and tangible evidence related to this claim, including but not limited to: the complete claim file; all adjuster notes, diaries, and activity logs; all reserve information and reserve change documentation; all internal communications; all expert reports and evaluations; all claim handling guidelines, manuals, and training materials; and all quality assurance or audit reports.

Destruction of any such material after receipt of this letter may constitute spoliation of evidence and give rise to adverse inferences and additional sanctions in litigation.

XIII. CONCLUSION

Maine requires that every motor vehicle liability policy sold in this State include UM/UIM coverage to protect insureds from the financial devastation of an encounter with an uninsured or underinsured driver. Our client paid premiums for precisely this protection. The Company's opportunity to honor that promise — and to resolve this matter fairly, cost-efficiently, and within the policy limits — expires on [__/__/____].

Please direct all communications regarding this matter to the undersigned.

Respectfully submitted,

[LAW FIRM NAME]

By: ___________________________________
[________________________________]
Maine Bar No. [____]
[________________________________]
[________________________________], ME [________]
Tel: [________________________________]
Fax: [________________________________]
Email: [________________________________]

Counsel for [________________________________]

ENCLOSURES:
☐ Policy declarations page and UM/UIM endorsement
☐ Equal-limits rejection form (if applicable)
☐ Police / crash report
☐ Complete medical records and bills
☐ Photographs of scene, vehicles, and injuries
☐ Proof of tortfeasor's insurance limits (or lack thereof)
☐ Employer verification / wage loss documentation
☐ Expert reports (medical, vocational, economic, life care plan)
☐ Accident reconstruction report (if applicable)

CC:
☐ [________________________________] (Client)
☐ [________________________________] / [Tortfeasor's Carrier] (re: consent to settle request)
☐ Maine Bureau of Insurance (if complaint filed simultaneously)

MAINE UM/UIM LAW — QUICK REFERENCE

SOURCES AND REFERENCES

• Maine Legislature — 24-A M.R.S.A. § 2902: https://legislature.maine.gov/statutes/24-a/title24-Asec2902.html
• Maine Legislature — 24-A M.R.S.A. § 2436: https://legislature.maine.gov/statutes/24-a/title24-Asec2436.html
• Maine Legislature — 24-A M.R.S.A. § 2436-A: https://legislature.maine.gov/statutes/24-a/title24-Asec2436-A.html
• Maine Legislature — 24-A M.R.S.A. § 2164-D: https://www.mainelegislature.org/legis/statutes/24-a/title24-Asec2164-D.html
• Maine Legislature — 14 M.R.S.A. § 156 (Comparative Negligence): https://mainelegislature.org/legis/statutes/14/title14sec156.html
• Maine Legislature — 14 M.R.S.A. § 752 (Statute of Limitations): https://www.mainelegislature.org/legis/statutes/14/title14ch205.pdf
• Maine.gov — Insurance Required by Law (UM/UIM): https://www.maine.gov/pfr/insurance/consumers/auto-insurance/insurance-required-by-law
• Marquis v. Farm Family Mut. Ins. Co., 628 A.2d 644 (Me. 1993): https://law.justia.com/cases/maine/supreme-court/1993/628-a-2d-644-0.html
• Tuttle v. Raymond, 494 A.2d 1353 (Me. 1985) — punitive damages standard
• ALFA International Maine Insurance Law Compendium: https://www.alfainternational.com/compendium/insurance-law/maine/
• Berman & Simmons — UIM Offset Analysis (2022): https://www.bermansimmons.com/latest-news/2022/october/the-underinsured-motorist-offset-the-policy-cont/
• Fales Law — Maine Car Insurance FAQs: https://www.faleslaw.com/auto-insurance-faqs.html