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. Stacking Rights — Mont. Code Ann. § 33-23-203 and Hardy v. Progressive

Montana strongly favors stacking of UM/UIM coverage. Under Mont. Code Ann. § 33-23-203, anti-stacking provisions are permissible only if explicitly stated in the policy. In Hardy v. Progressive Specialty Ins. Co., 2003 MT 85, the Montana Supreme Court confirmed that absent an express anti-stacking provision, an insured may stack UM/UIM limits across multiple vehicles on the same policy — or across separate policies — to maximize recovery.

Stacking 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
☐ The at-fault driver's coverage limits are below Montana's statutory minimums under § 61-6-103

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 (§ 61-8-401, 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 Fault (51% Bar)

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 — i.e., a plaintiff who is 50% or less at fault may recover, but recovery is barred if the plaintiff's fault exceeds 50%. 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

Montana does not cap non-economic damages in personal injury cases. 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

Montana law and most UM/UIM policies require the insurer's consent before settling with the at-fault driver to preserve the insurer's subrogation rights. Pursuant to Montana law and [CARRIER SHORT NAME]'s policy, we hereby formally request written consent to accept the tortfeasor's policy limits of $[__________].

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

Failure to timely respond to this consent request may constitute a waiver of subrogation rights and may itself constitute conduct in violation of Mont. Code Ann. § 33-18-201.

VII. UIM BENEFITS CALCULATION AND DEMAND

A. Offset / Setoff Analysis

Montana UM/UIM law generally permits the insurer to offset UIM benefits by amounts actually recovered from the at-fault party. The precise offset method (limits-to-limits vs. damages-less-paid) is governed by policy language, and any ambiguity is construed liberally in favor of coverage under Montana law. See Hardy v. Progressive Specialty Ins. Co., 2003 MT 85, 315 Mont. 107, 67 P.3d 892.

B. Policy Limits Demand

We hereby demand payment of the full UM/UIM policy limits of $[__________] (stacked, if applicable under Hardy v. Progressive and § 33-23-203).

Our client's total damages of $[__________] vastly exceed the combined coverage available from all sources. This is a clear policy limits case. [CARRIER SHORT NAME] has an obligation to its own insured to tender the full limits without further delay.

VIII. MONTANA UNFAIR TRADE PRACTICES ACT — BAD FAITH WARNING

A. Duties Owed to Your Own Insured

[CARRIER SHORT NAME] owes our client — its own insured — the duties of good faith and fair dealing under both the Montana Unfair Trade Practices Act (MUTPA), Mont. Code Ann. §§ 33-18-201 and 33-18-242, and Montana common law. See Gibson v. Western Fire Ins. Co., 210 Mont. 267, 682 P.2d 725 (1984); Ridley v. Guaranty Nat'l Ins. Co., 286 Mont. 325, 951 P.2d 987 (1997).

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))
☐ Failing to acknowledge and act promptly on communications about the claim (§ 33-18-201(4))
☐ Failing to adopt and implement reasonable investigation standards (§ 33-18-201(5))
☐ Refusing to pay a claim without conducting a reasonable investigation (§ 33-18-201(6))
☐ Failing to affirm or deny coverage within a reasonable time (§ 33-18-201(9))
☐ Not attempting good faith settlement when liability is reasonably clear (§ 33-18-201(6))
☐ Compelling litigation by offering substantially less than ultimately recoverable (§ 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 recoverable under MUTPA where the insurer's conduct was without reasonable basis

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]." Arbitration under Montana law is governed by Mont. Code Ann. § 27-5-101 et seq.]

B. Arbitration Notice (If Applicable)

If [CARRIER SHORT NAME] declines to tender the policy limits demanded herein, this letter serves as notice of our intent to invoke arbitration pursuant to the policy and Mont. Code Ann. § 27-5-101 et seq. Our client selects [________________________________] as arbitrator. Please designate your arbitrator within [____] days.

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. Arbitration or suit will be filed immediately in Montana District Court ([________________________________] County) seeking UM/UIM benefits, bad faith damages, punitive damages, and attorney's fees
2. Bad faith exposure escalates — [CARRIER SHORT NAME] will have knowingly failed to protect its own insured from a judgment in excess of policy limits in violation of Montana law
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/