UM/UIM Demand Letter - Montana

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Montana

[LAW FIRM LETTERHEAD]

SETTLEMENT COMMUNICATION — FOR RESOLUTION PURPOSES ONLY
EVIDENTIARY USE MAY BE LIMITED BY MONT. R. EVID. 408 AND FED. R. EVID. 408, WHERE APPLICABLE

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

Date: [__/__/____]

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

Attention: [________________________________], [Title]
Re: UM/UIM POLICY LIMITS DEMAND — MONTANA
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. Mountain Time

Dear [________________________________]:

I. INTRODUCTION AND NATURE OF DEMAND

This firm represents [________________________________] ("our client") in connection with a claim for [uninsured/underinsured] motorist benefits arising from a motor vehicle collision on [__/__/____] in [________________________________], Montana. This letter constitutes a formal demand for payment of the full UM/UIM policy limits of $[________________________________] pursuant to Mont. Code Ann. § 33-23-201 et seq. and the applicable policy.

Our client's documented damages of $[________________________________] far exceed the available coverage from the at-fault party. Montana's uninsured motorist statute, Mont. Code Ann. § 33-23-201, exists precisely for this situation: to protect your own insured when a negligent driver lacks sufficient insurance to cover the harm they caused. (UM coverage is mandatory in Montana unless rejected in writing; underinsured motorist coverage is optional under § 61-6-103(8), and our client purchased the UM/UIM coverage at issue here.)

II. MONTANA UM/UIM LEGAL FRAMEWORK

A. Mandatory UM Coverage; Optional UIM — Mont. Code Ann. § 33-23-201 & § 61-6-103(8)

Under Mont. Code Ann. § 33-23-201, every motor vehicle liability policy issued or delivered in Montana must provide uninsured motorist coverage "in limits for bodily injury or death set forth in 61-6-103" — currently $25,000 per person / $50,000 per accident — unless the named insured rejects the coverage in writing. Underinsured motorist coverage is optional in Montana under § 61-6-103(8) (offered, not mandated); where the insured has purchased UIM coverage — as our client did — it is governed by the policy and Montana's rule construing insurance policies liberally in favor of coverage. Policies that purport to restrict mandated UM benefits below the statutory floor are void to that extent.

B. Minimum Liability Limits — Mont. Code Ann. § 61-6-103

Montana's minimum liability limits are:

• $25,000 per person for bodily injury or death
• $50,000 per accident for bodily injury or death
• $20,000 per accident for property damage

C. Available Coverage Limits — Mont. Code Ann. § 33-23-203

The available limit depends on the policy language and the conditions in Mont. Code Ann. § 33-23-203. Subsection (1)(c) restricts adding limits under one or more policies issued by the same company only when the insurer's premiums actuarially reflect separate limits and the premium rates have been filed with the commissioner. Identify each applicable policy, the limit language, and the basis for any proposed addition or restriction before stating the total demanded.

Available Coverage Analysis for This Claim:

D. Coverage Analysis

E. Coverage Trigger

For Uninsured Motorist (UM) Claims — Check All That Apply:

☐ The at-fault driver carried no liability insurance at the time of the collision
☐ The at-fault driver's insurer has disclaimed or denied coverage
☐ The at-fault driver's insurer is insolvent or in receivership
☐ The at-fault driver fled the scene and cannot be identified (hit-and-run); our client made reasonable efforts to identify the driver as required by Montana law

If liability insurance or a bond applies, a limit below § 61-6-103's financial-responsibility minimum does not, by itself, make the vehicle uninsured under § 33-23-201(1). Evaluate any UIM claim under the policy and applicable law.

For Underinsured Motorist (UIM) Claims — Check All That Apply:

☐ The at-fault driver's liability limits of $[__________] per person are insufficient to compensate our client for total damages of $[________________________________]
☐ Our client has exhausted (or will exhaust, pending consent) the at-fault driver's policy limits
☐ Damages exceed available liability coverage by $[________________________________]

III. THE COLLISION AND LIABILITY

A. Facts of the Collision

On [__/__/____], at approximately [____] a.m./p.m., our client [________________________________] was [________________________________] at or near [________________________________], [City], Montana ([County] County).

[DESCRIBE THE COLLISION IN DETAIL — INCLUDE ROAD CONDITIONS, WEATHER, DIRECTION OF TRAVEL, AND POINT OF IMPACT]

B. At-Fault Driver's Negligence

The at-fault driver, [________________________________], was negligent under Montana law — including the applicable provisions of Title 61, MCA (Motor Vehicles) — in the following respects:

☐ Failure to maintain proper lookout (§ 61-8-[____], MCA)
☐ Failure to yield right-of-way (§ 61-8-[____], MCA)
☐ Following too closely (§ 61-8-329, MCA)
☐ Exceeding safe speed for conditions (§ 61-8-303, MCA)
☐ Distracted driving / use of handheld device (§ 61-8-[____], MCA)
☐ Failure to obey traffic control device (§ 61-8-[____], MCA)
☐ Improper lane change / unsafe lane use (§ 61-8-[____], MCA)
☐ Driving under the influence (§ 61-8-1002, MCA)
☐ [________________________________]

C. Evidence of Liability

1. Law Enforcement Report
[________________________________] Traffic Crash Report, Report No. [________________________________], dated [__/__/____]. The report [SUMMARIZE OFFICER'S FINDINGS, CITATIONS ISSUED, FAULT NOTATION].

2. Witness Statements
[____] independent witnesses observed the collision:

• [________________________________]: [BRIEF SUMMARY OF STATEMENT]
• [________________________________]: [BRIEF SUMMARY OF STATEMENT]

3. Physical Evidence
Point of impact, vehicle damage patterns, debris field location, and [________________________________] all confirm the at-fault driver's negligence.

4. Expert Analysis (if applicable)
[________________________________] of [________________________________] has performed an accident reconstruction and concluded: [________________________________].

D. Comparative Negligence — Montana Modified Comparative Negligence

Montana follows modified comparative negligence under Mont. Code Ann. § 27-1-702. A plaintiff's contributory negligence does not bar recovery so long as it is not greater than the negligence of the person or combined persons against whom recovery is sought. Any recovery is reduced in proportion to the plaintiff's share of fault. Our client bears [no / minimal — [____]%] fault for this collision and is entitled to recover full (or [____]% reduced) compensation.

IV. OUR CLIENT'S INJURIES AND TREATMENT

A. Injury Summary

As a direct and proximate result of the [__/__/____] collision, our client sustained the following injuries, confirmed by medical examination:

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

B. Emergency and Acute Care

Our client was transported by [ambulance / private vehicle] to [________________________________] ([City], Montana) on [__/__/____], where the following acute treatment was provided: [________________________________].

C. Treatment Timeline

D. Current Condition and Prognosis

[DESCRIBE CURRENT CONDITION, FUNCTIONAL LIMITATIONS, AND PROGNOSIS — REFERENCE TREATING PHYSICIAN'S OPINION]

E. Permanent Impairment Rating

Per [________________________________], M.D., our client has sustained the following permanent impairments per the AMA Guides to the Evaluation of Permanent Impairment:

V. DAMAGES

A. Past Medical Expenses

B. Future Medical Expenses (Present Value)

Per [________________________________], M.D. / life care planner [________________________________]:

C. Lost Income

Past Lost Income: Our client missed [____] days of work from [__/__/____] to [__/__/____] at a rate of $[________] per [day/week], totaling $[__________].

Future Lost Earning Capacity (Present Value): Based on the opinion of vocational expert [________________________________] and economist [________________________________], our client has suffered a diminished earning capacity with a present value of $[__________].

D. Non-Economic Damages

The medical malpractice noneconomic damage limit in Mont. Code Ann. § 25-9-411 applies to malpractice claims against health care providers, not the ordinary auto-injury claim described here. Confirm whether any other limit applies to the parties or claims before stating the demand. Our client has endured:

• Physical pain and suffering: [DESCRIBE — chronic pain, mobility limitations, sleep disruption, etc.]
• Emotional distress: [DESCRIBE — anxiety, depression, fear of driving, PTSD if diagnosed]
• Loss of enjoyment of life: [DESCRIBE — activities no longer possible, hobbies abandoned, family impact]
• Loss of consortium (if applicable): [DESCRIBE impact on spouse/family]

Non-economic damages are conservatively estimated at $[__________].

E. Damages Summary

VI. CONSENT TO SETTLE WITH AT-FAULT DRIVER'S CARRIER

A. Settlement Status

We [have reached / are pursuing] a settlement with [________________________________]'s liability carrier, [________________________________], for its policy limits of $[__________].

B. Request for Consent to Settle

If the identified policy requires consent before settling with the at-fault driver, we request written consent under [IDENTIFY POLICY PROVISION] to accept the tortfeasor's policy limits of $[__________].

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

Please state the insurer's position and any policy provision governing consent or subrogation in the written response.

VII. UIM BENEFITS CALCULATION AND DEMAND

A. Offset / Setoff Analysis

State each amount actually received from the at-fault party and the policy provision and legal basis for any proposed reduction of UIM benefits. The calculation below is a claim worksheet; it does not determine the insurer's contractual obligation by itself.

B. Policy Limits Demand

We hereby demand payment of UM/UIM benefits of $[__________], based on the identified policy terms, documented loss, and applicable limits under § 33-23-203.

The documented total damages are $[__________]; the available coverage limits claimed above are $[__________]. If the completed evidence and applicable policy terms support payment of the full available limit, we request tender of that limit. Please explain any disputed amount and identify the policy provision and factual basis for the insurer's position.

VIII. MONTANA UNFAIR TRADE PRACTICES ACT — BAD FAITH WARNING

A. Duties Owed to Your Own Insured

Mont. Code Ann. § 33-18-242 allows an insured to bring a claim-handling action for a supported contract breach, fraud, or a violation of the specified parts of § 33-18-201. Subsection (3) bars a separate bad-faith cause of action for the handling of an insurance claim.

B. Prohibited Conduct Under § 33-18-201

The following conduct — if engaged in by [CARRIER SHORT NAME] — constitutes a violation of Mont. Code Ann. § 33-18-201 and gives rise to an independent cause of action under § 33-18-242:

☐ Misrepresenting pertinent facts or policy provisions (§ 33-18-201(1))
☐ Refusing payment without a reasonable investigation (§ 33-18-201(4))
☐ Failing to affirm or deny coverage within a reasonable time after completed proof of loss (§ 33-18-201(5))
☐ Failing to attempt prompt, fair settlement when liability became reasonably clear (§ 33-18-201(6))
☐ Attempting settlement based on an application altered without the insured's notice, knowledge, or consent (§ 33-18-201(9))
☐ Delaying settlement under one coverage to influence settlement under another when liability became reasonably clear (§ 33-18-201(13))

C. Private Right of Action and Available Damages

Under Mont. Code Ann. § 33-18-242, an insured has an independent private right of action against its own insurer for violations of § 33-18-201(1), (4), (5), (6), (9), or (13). Recoverable damages include:

1. Actual damages proximately caused by the MUTPA violation
2. Punitive damages if [CARRIER SHORT NAME] acted with actual malice or actual fraud, proven by clear and convincing evidence (Mont. Code Ann. § 27-1-221); capped under Mont. Code Ann. § 27-1-220(3) at the lesser of $10,000,000 or 3% of [CARRIER SHORT NAME]'s net worth
3. Attorney's fees may be recoverable under Montana's insurance exception to the American Rule when the insurer forces its insured to litigate to obtain the full benefit of the insurance contract; they are not an automatic MUTPA remedy. See Mountain West Farm Bureau Mut. Ins. Co. v. Brewer, 2003 MT 98, ¶ 36.

D. Prejudgment Interest

Our client is entitled to prejudgment interest under Mont. Code Ann. § 27-1-211 on all liquidated amounts from the date those amounts became due and owing.

Any unreasonable delay in payment of this clearly established UM/UIM claim will compound [CARRIER SHORT NAME]'s exposure substantially.

IX. ARBITRATION

A. Policy Arbitration Clause

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

IF APPLICABLE: The policy provides at Section [____]: "[QUOTE ARBITRATION PROVISION]." Mont. Code Ann. § 27-5-114(2)(a), (c) excludes personal-injury and insurance-policy disputes from its rule enforcing agreements to arbitrate future controversies. The parties may make a written agreement to arbitrate this existing dispute under § 27-5-114(1).

B. Arbitration Notice (If Applicable)

If [CARRIER SHORT NAME] declines to tender the benefits demanded herein, our client offers to submit this existing dispute to arbitration by a new written agreement under Mont. Code Ann. § 27-5-114(1). Please state whether the carrier agrees and propose an arbitrator and procedure. This offer does not itself compel arbitration.

X. RESPONSE DEADLINE

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

This is a time-limited demand. The full policy limits of $[__________] must be tendered and unconditionally accepted by the deadline above.

Consequences of Non-Response or Refusal

If [CARRIER SHORT NAME] fails to tender the full policy limits by the deadline:

1. Suit may be filed in Montana District Court ([________________________________] County) seeking UM/UIM benefits and, if supported by the facts, relief under Mont. Code Ann. § 33-18-242, exemplary damages under § 27-1-221, and recoverable attorney's fees; the parties may separately agree in writing to arbitrate this existing dispute
2. Claim-handling exposure may increase if an unreasonable failure to investigate or attempt a fair settlement causes actual damages under Mont. Code Ann. §§ 33-18-201(4), (6) and 33-18-242
3. Regulatory complaint will be filed with the Montana Commissioner of Securities and Insurance, 840 Helena Avenue, Helena, MT 59601, Phone: (406) 444-2040
4. All evidence of [CARRIER SHORT NAME]'s claims handling will be preserved and used in subsequent litigation

XI. DOCUMENT PRESERVATION NOTICE

This letter constitutes a formal litigation hold notice. [CARRIER SHORT NAME] must immediately preserve and prevent destruction of all documents and electronically stored information (ESI) related to this claim, including:

• The complete claim file in all versions and formats
• All internal and external communications regarding this claim
• Adjuster notes, activity logs, diaries, and reserve worksheets
• All reserve changes and supervisory approvals
• Claim handling guidelines, procedures, and training materials applicable to UM/UIM claims
• All expert reports, medical reviews, and independent medical examinations
• Quality assurance audits, peer reviews, or similar evaluations
• Communications with reinsurers or excess carriers regarding this claim

Failure to preserve this material may result in spoliation sanctions in subsequent litigation.

XII. CONCLUSION

[CARRIER SHORT NAME] has an opportunity — and a legal obligation — to resolve this matter fairly by tendering the full UM/UIM policy limits to its own insured. Our client's damages are documented, substantial, and far exceed the available coverage. Montana's UM/UIM statute was enacted to protect insureds in exactly this situation.

We strongly urge prompt resolution. Please direct all communications to the undersigned.

Respectfully submitted,

[________________________________]

By: ___________________________
[________________________________]
Montana Bar No. [________]
[________________________________]
[City], MT [Zip]
Tel: [________________________________]
Email: [________________________________]

Counsel for [________________________________]

ENCLOSURES:

• Policy declarations page and applicable UM/UIM endorsements
• Police / traffic crash report (Report No. [________________])
• Medical records and itemized billing statements
• Wage loss documentation / employer verification
• Photographs of vehicles and scene
• Expert reports (accident reconstruction, medical, vocational, economic)
• Evidence of at-fault driver's policy limits (denial letter / coverage confirmation)

CC:

• [CLIENT NAME] — [Address]
• [At-Fault Driver's Carrier] (re: consent to settle with tortfeasor)

MONTANA UM/UIM LAW QUICK REFERENCE

SOURCES AND REFERENCES

• Mont. Code Ann. § 33-23-201: https://law.justia.com/codes/montana/title-33/chapter-23/part-2/section-33-23-201/
• Mont. Code Ann. § 33-18-242: https://law.justia.com/codes/montana/title-33/chapter-18/part-2/section-33-18-242/
• Mont. Code Ann. § 27-1-221 (punitive damages — liability/proof): https://law.justia.com/codes/montana/title-27/chapter-1/part-2/section-27-1-221/
• Mont. Code Ann. § 27-1-220(3) (punitive damages cap): https://mca.legmt.gov/bills/mca/title_0270/chapter_0010/part_0020/section_0200/0270-0010-0020-0200.html
• Mont. Code Ann. § 27-1-702: https://archive.legmt.gov/bills/mca/title_0270/chapter_0010/part_0070/section_0020/0270-0010-0070-0020.html
• Montana Commissioner of Securities and Insurance: https://csimt.gov
• ALFA International — Montana Insurance Law Compendium: https://www.alfainternational.com/compendium/insurance-law/montana/
• Chartwell Law — Montana Bad Faith Guide: https://www.chartwelllaw.com/bad-faith-claims-map/montana
• Montana UM/UIM Overview (LegalClarity): https://legalclarity.org/montana-uninsured-motorist-coverage-rules-and-limits/