UM/UIM Demand Letter - Nevada

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Nevada

[LAW FIRM LETTERHEAD]

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION — FOR RESOLUTION PURPOSES ONLY
PROTECTED UNDER NRS 48.015 ET SEQ. AND F.R.E. 408

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

Date: [__/__/____]

[INSURANCE_COMPANY_NAME]
[UM/UIM_CLAIMS_DEPARTMENT_ADDRESS]
[CITY], [STATE] [ZIP]

Attention: [ADJUSTER_NAME], [ADJUSTER_TITLE]

Re: UM/UIM POLICY LIMITS DEMAND — NEVADA 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. Pacific Time

Dear [ADJUSTER_NAME]:

I. INTRODUCTION AND NATURE OF DEMAND

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

Our client's damages far exceed the coverage available from the at-fault party. Under Nevada law, UM/UIM coverage was created precisely for this situation — to protect your insured when the negligent driver lacks sufficient insurance. Nevada is unique in that NRS 686A.310(2) grants our client a direct private right of action against you for damages sustained as a result of any unfair claim-handling practice, independent of any common-law bad faith claim. We expect this claim to be handled accordingly.

II. NEVADA UM/UIM LAW — GOVERNING FRAMEWORK

A. Mandatory Offer and Written Rejection Requirement — NRS 687B.145

Under NRS 687B.145(2), every insurer transacting motor vehicle insurance in Nevada must offer uninsured and underinsured vehicle coverage in an amount equal to the bodily injury liability limits sold to the insured, on a form approved by the Commissioner. The insured may reject UM/UIM coverage only by written rejection on the Commissioner-approved form. If no valid written rejection exists, coverage is implied by operation of law regardless of policy language.

Nevada minimum liability limits are $25,000 per person / $50,000 per accident (25/50), established by SB 308, effective July 1, 2018. UM/UIM coverage must be offered at no less than this level.

B. Anti-Stacking / Proration Rule — NRS 687B.145(1)

Nevada limits UM/UIM stacking. Where multiple policies or coverage provisions are available, recovery may equal but not exceed the higher of the applicable limits. Any recovery is prorated between applicable coverages in proportion to their respective limits. See NRS 687B.145(1).

C. No Subrogation Against Underinsured Tortfeasor — NRS 687B.145(4)

Under NRS 687B.145(4), an insurer that pays underinsured vehicle benefits has no right of subrogation against the underinsured motorist who is liable to the insured. This provision eliminates any subrogation argument the Company might assert to reduce or condition its payment.

D. UIM "Legal Entitlement" Requirement

To establish a UM/UIM bad faith claim, our client must demonstrate legal entitlement — specifically, tortfeasor fault, resulting damages, and their extent. Pemberton v. Farmers Ins. Exch., 109 Nev. 789, 796–97, 858 P.2d 380, 384 (1993). Our client has satisfied this requirement as detailed herein. A judgment against the tortfeasor is not required before UM/UIM benefits are owed. Id.

E. Coverage Analysis

III. COVERAGE TRIGGER

A. For Uninsured Motorist (UM) Claims

The tortfeasor qualifies as an "uninsured motorist" under NRS 690B.020 and NRS 687B.145 because (select all applicable):

☐ The tortfeasor carried no liability insurance at the time of the collision
☐ The tortfeasor's insurer has denied coverage
☐ The tortfeasor's insurer is insolvent
☐ The tortfeasor was a hit-and-run driver who cannot be identified
☐ The tortfeasor's insurance limits are less than Nevada's 25/50/20 minimums

B. For Underinsured Motorist (UIM) Claims

The tortfeasor qualifies as an "underinsured motorist" because:

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

IV. THE COLLISION AND LIABILITY

A. Facts of the Collision

On [__/__/____], at approximately [____] [a.m./p.m.], our client was [DESCRIBE_CLIENT_ACTIVITY — e.g., operating a motor vehicle traveling northbound on] [STREET/HIGHWAY], near [CROSS_STREET/LANDMARK], [CITY], Nevada, when the collision occurred.

[DETAILED_DESCRIPTION_OF_COLLISION — include weather/road conditions, direction of travel, point of impact, pre-impact speeds, and post-impact positions]

B. Tortfeasor's Negligence Under Nevada Law

The tortfeasor, [TORTFEASOR_NAME], was negligent and directly caused this collision. Under NRS 41.141, Nevada applies modified comparative negligence with a 51% bar — a plaintiff is barred from recovery only if his or her comparative fault exceeds 50%. Our client bears no comparative fault. The tortfeasor's negligence included:

☐ Failure to maintain proper lookout — NRS 484B.270
☐ Failure to yield right-of-way — NRS 484B.257
☐ Following too closely — NRS 484B.127
☐ Excessive speed / speed unsafe for conditions — NRS 484B.600
☐ Distracted driving / use of handheld device — NRS 484B.165
☐ Running red light or stop sign — NRS 484B.307
☐ Improper lane change — NRS 484B.223
☐ Driving under the influence — NRS 484C.110
☐ [OTHER_NEGLIGENCE: ________________________________]

C. Evidence of Liability

1. Police/Crash Report
[POLICE_DEPARTMENT] Traffic Crash Report No. [REPORT_NUMBER], dated [__/__/____], finding the tortfeasor at fault / citing the tortfeasor for [CITATION_NRS_CODE].

2. Witness Statements
[NUMBER] independent witnesses confirmed [SUMMARY_OF_WITNESS_OBSERVATIONS].

3. Physical Evidence
Point of impact, vehicle damage patterns, skid marks, and debris field are consistent with [DESCRIBE_PHYSICAL_EVIDENCE].

4. Expert Analysis
[ACCIDENT_RECONSTRUCTIONIST_NAME] of [FIRM], having reviewed all available evidence, has concluded: [SUMMARY_OF_EXPERT_OPINION]. Report enclosed.

5. Video / Electronic Evidence
[DESCRIBE_SURVEILLANCE_DASHCAM_OR_OTHER_VIDEO_EVIDENCE, if applicable]

V. OUR CLIENT'S INJURIES AND MEDICAL TREATMENT

A. Injury Summary

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

Primary Injuries:

• [PRIMARY_INJURY_1 — e.g., L4-L5 disc herniation with radiculopathy]
• [PRIMARY_INJURY_2 — e.g., traumatic brain injury / concussion]
• [PRIMARY_INJURY_3 — e.g., fractured [BONE]]

Secondary Injuries:

• [SECONDARY_INJURY_1]
• [SECONDARY_INJURY_2]

B. Treatment Timeline

C. Current Condition and Prognosis

[DESCRIBE_CURRENT_CONDITION — include functional limitations, ongoing symptoms, treating physician's prognosis, whether maximum medical improvement has been reached, and any permanent restrictions]

D. Permanent Impairment Rating

Per American Medical Association Guides, [EDITION] Edition, assessed by [PHYSICIAN_NAME], [SPECIALTY], on [__/__/____].

VI. DAMAGES

A. Past Medical Expenses

B. Future Medical Expenses (Present Value)

Based on the life care plan of [LIFE_CARE_PLANNER_NAME]:

C. Lost Income

Past Lost Income: $[TOTAL_PAST_LOST_INCOME]
(Based on [EMPLOYER_NAME] records confirming [NUMBER] days / [NUMBER] weeks missed at $[DAILY/WEEKLY_RATE])

Future Lost Earning Capacity (Present Value): $[FUTURE_LOST_EARNING_CAPACITY]
(Per economic analysis of [ECONOMIST_NAME], [CREDENTIALS], dated [__/__/____])

D. Non-Economic Damages (Pain and Suffering)

[DESCRIBE_PAIN_AND_SUFFERING — include daily limitations, inability to perform prior activities, effect on family relationships, sleep disturbance, psychological sequelae, and duration. Nevada imposes no cap on non-economic damages in personal injury cases.]

E. Damages Summary

VII. SETTLEMENT WITH TORTFEASOR'S INSURER

A. Settlement Status

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

☐ We are pursuing settlement with [TORTFEASOR_CARRIER] for the tortfeasor's policy limits of $[TORTFEASOR_LIMITS].

☐ The tortfeasor is uninsured. No third-party settlement is applicable.

B. Consent to Settle and Preservation of Subrogation Rights

Pursuant to Nevada law and the terms of your policy, we hereby request written consent to settle with the tortfeasor's liability carrier for the amount stated above.

Please provide written consent within [NUMBER] days of this letter. Unreasonable withholding of consent may waive the Company's subrogation rights. Under NRS 687B.145(4), you have no subrogation rights against an underinsured motorist for amounts paid under UIM coverage in any event.

VIII. CALCULATION OF UIM/UM BENEFITS DUE

Our client's total damages of $[TOTAL_DAMAGES] vastly exceed all available coverage. This is a clear policy-limits case. Under NRS 687B.145, the Company owes the full UM/UIM limits.

WE HEREBY DEMAND PAYMENT OF THE FULL UM/UIM POLICY LIMITS OF $[UM_UIM_LIMITS].

IX. BAD FAITH WARNING — NEVADA PRIVATE RIGHT OF ACTION

A. Nevada's Unique Statutory Private Right of Action

Nevada stands apart from most states. Under NRS 686A.310(2), our client — as a first-party insured — has a direct private right of action against the Company for any damages sustained as a result of any unfair claims practice enumerated in NRS 686A.310(1). This right has existed since the 1987 amendments to Nevada's Unfair Claims Settlement Practices Act. A single violation is sufficient to trigger liability. Hart v. Prudential Property & Cas. Ins. Co., 848 F. Supp. 900, 903 (D. Nev. 1994).

Importantly, this statutory cause of action exists alongside — not instead of — the common-law bad faith tort. Id. at 904. Our client may pursue both simultaneously.

B. Common Law Bad Faith Standard

Under Nevada common law, bad faith is established where the insurer:

1. Denies or refuses to pay an insurance claim;
2. With no reasonable basis for its denial or refusal; and
3. With knowledge of, or reckless disregard for, the fact that no reasonable basis existed.

Pioneer Chlor Alkali Co. v. National Union Fire Ins. Co., 863 F. Supp. 1237, 1250 (D. Nev. 1994); Guaranty Nat'l Ins. Co. v. Potter, 112 Nev. 199, 206, 912 P.2d 267, 272 (1996); American Excess Ins. Co. v. MGM Grand Hotels, 102 Nev. 601, 605, 729 P.2d 1352 (1986).

The Company owes our client duties akin to a fiduciary in investigating and evaluating this claim. Powers v. USAA, 114 Nev. 690, 700–01, 962 P.2d 596 (1998). Any unreasonable delay or denial will constitute bad faith.

C. Claim-Handling Timing Requirements

Under NAC 686A.665 and NAC 686A.670, the Company must:

• Acknowledge notice of claim within 15 calendar days — NAC 686A.665(1)
• Provide necessary claim forms within 20 working days of notice — NAC 686A.665(4)
• Commence investigation within 20 working days of notice — NAC 686A.670(1)
• Complete investigation within 30 days of notice, absent documented inability — NAC 686A.670(2)
• Affirm or deny coverage within a reasonable time after proof of loss — NRS 686A.310(1)(d)

D. Damages Available for Bad Faith Under Nevada Law

If the Company acts in bad faith, our client is entitled to recover:

Critical Nevada Rule on Punitive Damages: Under NRS 42.005(2)(b), the general punitive damages cap (3x compensatory or $300,000) does not apply to actions against an insurer acting in bad faith regarding its insurance coverage obligations. Punitive damages in insurer bad faith cases are uncapped in Nevada. Under NRS 42.007(2), the limitations on employer corporate liability for employee misconduct also do not apply in insurer bad faith cases — the Company cannot hide behind adjuster-level decisions.

X. ARBITRATION PROVISIONS (IF APPLICABLE)

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

☐ [IF ARBITRATION CLAUSE EXISTS]: The policy's arbitration clause provides: "[QUOTE_ARBITRATION_CLAUSE]." We are prepared to proceed to arbitration under this clause and Nevada law if the Company does not accept this demand. We hereby designate [ARBITRATOR_NAME] as our arbitrator. Please designate your arbitrator within [NUMBER] days.

☐ [IF NO ARBITRATION CLAUSE]: In the event this demand is not accepted, we will file suit in [Clark County / Washoe County / ________] District Court, Nevada.

XI. RESPONSE DEADLINE AND CONSEQUENCES

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

This deadline is firm. If the Company fails to tender the full UM/UIM policy limits by the deadline:

1. We will immediately file suit in Nevada District Court seeking all policy benefits plus bad faith damages;
2. We will pursue the Company's violations of NRS 686A.310(1)(b), (c), (d), (e), and/or (n) under NRS 686A.310(2)'s private right of action;
3. We will seek punitive damages under Nevada's uncapped bad faith punitive damages provision (NRS 42.005(2)(b) and NRS 42.007(2));
4. We will file a complaint with the Nevada Division of Insurance, 1818 E. College Parkway, Suite 103, Carson City, NV 89706 (Tel: 775-687-0700; Toll-Free: 1-888-872-3234);
5. We will seek attorney's fees under NRS 18.010(2)(a) as damages flowing from the Company's unfair practices.

The statute of limitations for contract claims in Nevada is 6 years (NRS 11.190(1)(b)); for tort/bad faith claims, 3 years (NRS 11.190(3)). We intend to act promptly.

XII. DOCUMENT PRESERVATION NOTICE

This letter constitutes formal notice to immediately preserve all documents, electronically stored information (ESI), and tangible items related to this claim, including but not limited to: the complete claim file and all versions; all adjuster notes, diary entries, and activity logs; all internal communications (email, text, Slack, Teams) regarding this claim; reserve documentation and reserve change history; claim-handling guidelines, desk references, and training materials applicable to UM/UIM claims; quality assurance and audit reports; and any communications with reinsurers.

Failure to preserve responsive materials will be cited to the court as spoliation.

XIII. CONCLUSION

[CARRIER_SHORT_NAME] sold our client a policy that promised protection against uninsured and underinsured drivers. That protection is now needed. The liability is clear, the injuries are severe, and the damages far exceed the available tortfeasor coverage. Nevada law — including its unique statutory private right of action under NRS 686A.310(2) and its uncapped punitive damages for insurer bad faith — provides powerful remedies should the Company fail to fulfill its obligations.

We strongly encourage [CARRIER_SHORT_NAME] to resolve this claim fairly within the deadline provided.

Please direct all communications to the undersigned.

Respectfully submitted,

[LAW_FIRM_NAME]

By: [________________________________]
[ATTORNEY_NAME]
Nevada Bar No. [________________________________]
[ADDRESS]
[CITY], NV [ZIP]
Tel: [________________________________]
Fax: [________________________________]
Email: [________________________________]

Counsel for [CLIENT_NAME]

ENCLOSURES:
☐ Policy declarations page and UM/UIM coverage provisions
☐ UM/UIM Selection/Rejection Form (or absence thereof)
☐ Police/crash report (Report No. [________________________________])
☐ Complete medical records and itemized bills
☐ Photographs — collision scene and vehicle damage
☐ Photographs — client injuries
☐ Lost wage documentation / employer verification
☐ Life care plan ([LIFE_CARE_PLANNER_NAME])
☐ Economic loss analysis ([ECONOMIST_NAME])
☐ Permanent impairment rating ([PHYSICIAN_NAME])
☐ Accident reconstruction report ([RECONSTRUCTIONIST_NAME]) (if applicable)
☐ Tortfeasor insurance verification / policy limits confirmation

CC:

• [CLIENT_NAME]
• [TORTFEASOR_CARRIER] (re: consent to settle / coordination)

NEVADA UM/UIM LAW QUICK REFERENCE

SOURCES AND REFERENCES

• NRS 687B.145: https://www.leg.state.nv.us/nrs/NRS-687B.html
• NRS 686A.310: https://law.justia.com/codes/nevada/chapter-686a/statute-686a-310/
• NRS 42.005 (punitive damages): https://www.leg.state.nv.us/nrs/nrs-042.html
• NRS 42.007: https://law.justia.com/codes/nevada/chapter-42/statute-42-007/
• NRS 41.141 (comparative negligence): https://www.leg.state.nv.us/nrs/NRS-041.html
• NAC 686A.665–686A.680 (claims regulations): https://www.leg.state.nv.us/nac/NAC-686A.html
• Nevada Division of Insurance: https://doi.nv.gov/
• Nevada DOI — UM/UIM information: https://doi.nv.gov/Consumers/Automobile_Insurance/Higher_Minimum_Vehicle_Liability_Requirements/
• Guaranty Nat'l Ins. Co. v. Potter, 112 Nev. 199, 912 P.2d 267 (1996)
• Pioneer Chlor Alkali Co. v. National Union Fire Ins. Co., 863 F. Supp. 1237 (D. Nev. 1994)
• Pemberton v. Farmers Ins. Exch., 109 Nev. 789, 858 P.2d 380 (1993)
• Allstate Insurance Co. v. Miller, 125 Nev. 300, 212 P.3d 318 (2009)
• U.S. Fid. & Guar. Co. v. Peterson, 540 P.2d 1070 (Nev. 1975)
• Nevada Bar article — NRS 686A.310 (Mills, 2013): https://nvbar.org/wp-content/uploads/NVL%20March%202013%20-%20ONLINE%20CONTENT%20-%20CMA%20Edits.pdf
• ALFA International Nevada Insurance Law Compendium: https://www.alfainternational.com/compendium/insurance-law/nevada/