UM/UIM Demand Letter - Ohio

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Ohio

[LAW FIRM LETTERHEAD]

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

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

Date: [__/__/____]

[INSURANCE COMPANY NAME]
[________________________________]
[________________________________]
[________________________________], OH [________]

Attention: [________________________________], [________________________________]
Re: FORMAL UM/UIM POLICY LIMITS DEMAND — OHIO 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 Ohio law arising from a motor vehicle collision on [__/__/____] in [________________________________], Ohio. This letter constitutes a formal demand for payment of the full UM/UIM policy limits of $[________________________________].

Our client's total damages, detailed herein, substantially exceed the combined coverage available. Ohio's UM/UIM statutes exist precisely for situations like this — to protect your own insured when a negligent party lacks sufficient insurance.

NOTICE UNDER OHIO ADMIN. CODE § 3901-1-54(F)(2): This letter constitutes notification of a UM/UIM claim. Under Ohio Admin. Code § 3901-1-54(F)(2), you are required to acknowledge receipt of this claim within fifteen (15) calendar days. Under § 3901-1-54(G)(1), you must accept or deny the claim within twenty-one (21) calendar days of receipt of a properly executed proof of loss, or provide written notice of the need for additional investigation with status updates at least every forty-five (45) days thereafter.

II. OHIO UM/UIM LAW — STATUTORY FRAMEWORK

A. Current Coverage Structure Under O.R.C. § 3937.18

Effective October 31, 2001, Senate Bill 97 amended O.R.C. § 3937.18 to make UM/UIM coverage optional rather than mandatory. An insurer is no longer required to offer UM/UIM coverage, and coverage no longer arises by operation of law. However, where a policy includes UM/UIM coverage — as in the present case — the insurer is bound by all statutory and contractual obligations governing that coverage.

Key provisions of O.R.C. § 3937.18 applicable to this claim:

• O.R.C. § 3937.18(C) — UIM Setoff/Offset Rule: UIM coverage is not excess coverage. The UIM policy limits are reduced by amounts available for payment under all applicable bodily injury liability bonds and insurance policies covering persons liable to the insured. Littrell v. Wigglesworth, 91 Ohio St.3d 425, 2001-Ohio-87, 746 N.E.2d 1077 (applying the "available for payment" — not "limits-to-limits" — standard).

• O.R.C. § 3937.18(D) — Burden of Proof: The insured must prove all elements of the claim that would be necessary to recover from the owner or operator of the uninsured or underinsured motor vehicle.

• O.R.C. § 3937.18(E) — Workers' Compensation: UM/UIM coverage shall not be subject to reduction because of any workers' compensation benefits payable as a result of the same injury or death.

• O.R.C. § 3937.18(F) — Anti-Stacking: A policy may include terms precluding all stacking of UM/UIM coverages, including both interfamily stacking (aggregating limits across different households) and intrafamily stacking (aggregating limits within the same household), if such anti-stacking language is expressly included in the policy.

• O.R.C. § 3937.18(I) — Permissible Exclusions: An insurer may exclude coverage in specific circumstances enumerated by statute, including when the insured is occupying a non-covered vehicle owned by a named insured (the "owned-but-not-insured" exclusion).

B. Financial Responsibility Minimums — O.R.C. § 4509.01

Per House Bill 278 (129th General Assembly, effective March 22, 2013), Ohio's minimum bodily injury liability limits are $25,000 per person / $50,000 per accident. The tortfeasor's coverage relative to these minimums is addressed in Section VI below.

C. Scott-Pontzer / Westfield Galatis — Corporate UM/UIM Coverage

[USE THIS SECTION IF THE CLAIM INVOLVES AN EMPLOYER'S BUSINESS AUTO POLICY]

Where our client was injured while in the course and scope of employment, UM/UIM coverage may be available under the employer's business automobile policy. Scott-Pontzer v. Liberty Mut. Fire Ins. Co., 85 Ohio St.3d 660, 1999-Ohio-292, 710 N.E.2d 1116, recognized that corporate UM/UIM policies could cover employees because a corporation cannot personally suffer bodily injury. Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, 797 N.E.2d 1256, narrowed Scott-Pontzer to provide that, absent specific policy language to the contrary, a policy naming a corporation as insured for UM/UIM coverage covers an employee's loss only if the loss occurs within the course and scope of employment. Our client was [________________________________] at the time of the collision and therefore qualifies under the Galatis standard.

D. Policy Coverage Summary

III. THE COLLISION AND LIABILITY

A. Facts of the Collision

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

[DETAILED NARRATIVE OF THE COLLISION:]

[________________________________]

[________________________________]

[________________________________]

B. Tortfeasor's Negligence

The tortfeasor, [________________________________], was negligent under Ohio law in the following respects:

☐ Failure to maintain proper lookout
☐ Failure to yield right-of-way as required by O.R.C. § [________]
☐ Following too closely in violation of O.R.C. § 4511.34
☐ Excessive speed for conditions in violation of O.R.C. § 4511.21
☐ Distracted driving in violation of O.R.C. § 4511.204 (texting/handheld device)
☐ Running red light/stop sign in violation of O.R.C. § 4511.13/4511.43
☐ Improper lane change in violation of O.R.C. § 4511.33
☐ Operating under the influence in violation of O.R.C. § 4511.19
☐ [________________________________]

C. Evidence of Liability

1. Ohio Traffic Crash Report
[________________________________] Police Department / Ohio State Highway Patrol Crash Report No. [________________________________], prepared by Officer [________________________________] (Badge No. [________]), on [__/__/____]. The report [________________________________].

2. Witness Statements
[____] independent witnesses corroborate our client's account. [________________________________]

3. Physical Evidence
Point of impact, vehicle damage patterns, skid marks, and debris field establish that [________________________________].

4. Photographs and Video
[________________________________] photographs and/or video footage from [________________________________] document the scene and damage.

5. Expert Analysis (if applicable)
[________________________________] (accident reconstructionist licensed in Ohio) has concluded that [________________________________].

D. Comparative Fault Analysis Under Ohio Law

Ohio follows a modified comparative fault system under O.R.C. § 2315.33. A plaintiff may recover damages so long as the plaintiff's own negligence is not greater than the combined negligence of all defendants. Our client bears zero comparative fault for this collision because [________________________________].

IV. 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:

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

Secondary/Consequential Conditions:

• [________________________________]
• [________________________________]

B. Treatment Timeline

C. Current Condition and Prognosis

[________________________________]

D. Permanent Impairment Rating

V. DAMAGES

A. Medical Expenses

Past Medical Expenses:

Future Medical Expenses (Present Value):

B. Lost Income / Earning Capacity

Employer: [________________________________]
Pre-Injury Earnings: $[________________] per [week/month/year]
Period of Lost Work: [__/__/____] through [__/__/____] ([____] weeks/months)

Supporting documentation: [________________________________]

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

Ohio law does not impose a statutory cap on non-economic damages in personal injury actions generally (note: O.R.C. § 2315.18 caps noneconomic damages in certain tort actions, but UM/UIM contract claims and associated tort claims are analyzed separately).

[DESCRIBE PAIN, SUFFERING, EMOTIONAL DISTRESS, LOSS OF ENJOYMENT OF LIFE, IMPACT ON RELATIONSHIPS, AND OTHER NON-ECONOMIC LOSSES:]

[________________________________]

[________________________________]

D. Total Damages Summary

VI. TORTFEASOR'S COVERAGE AND UIM TRIGGER

A. Tortfeasor's Insurance Status

The tortfeasor qualifies as an [UNINSURED / UNDERINSURED] motorist under O.R.C. § 3937.18 because:

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

☐ The tortfeasor carried no liability insurance at the time of the collision (confirmed by [________________________________])
☐ The tortfeasor's insurer has denied coverage; denial letter dated [__/__/____]
☐ The tortfeasor's insurer, [________________________________], has been declared insolvent
☐ The tortfeasor was a hit-and-run driver who cannot be identified (police report attached)
☐ The tortfeasor's policy limits are below Ohio's $25,000/$50,000 minimum per O.R.C. § 4509.01

For Underinsured Motorist (UIM) Claims:

The tortfeasor, [________________________________], carried liability limits of $[________________] through [________________________________]. These limits are insufficient to compensate our client for damages totaling $[________________]. Our client has [exhausted / agreed to exhaust] the tortfeasor's policy limits as a condition of the UIM claim.

B. UIM Offset Calculation Under O.R.C. § 3937.18(C)

Consistent with Littrell v. Wigglesworth, 91 Ohio St.3d 425, 2001-Ohio-87, the offset is based on amounts available for payment from the tortfeasor's carrier, not a strict limits-to-limits comparison:

VII. CONSENT TO SETTLE AND SUBROGATION

A. Request for Consent to Settle

We hereby formally request your written consent to accept the tortfeasor's policy limits of $[________________] from [________________________________].

Under Ohio law and the terms of the policy, failure to consent within a reasonable time, or unreasonable withholding of consent, may constitute waiver of any subrogation or reimbursement rights [CARRIER_SHORT_NAME] might otherwise assert against the tortfeasor. Please respond in writing within [____] days of this letter.

B. Preservation of Your Subrogation Rights

☐ We understand [CARRIER_SHORT_NAME] may wish to pursue subrogation or contribution against the tortfeasor. Upon payment of UM/UIM benefits, we will cooperate in good faith with any such efforts consistent with Ohio law.

VIII. BAD FAITH WARNING UNDER OHIO LAW

[CARRIER_SHORT_NAME] owes its own insured — your policyholder — the common law duty of good faith and fair dealing recognized in Ohio for decades.

A. Ohio's Bad Faith Standard

"An insurer fails to exercise good faith in the processing of a claim of its insured where its refusal to pay the claim is not predicated upon circumstances that furnish reasonable justification therefor."
— Zoppo v. Homestead Ins. Co., 71 Ohio St.3d 552, 554, 644 N.E.2d 397 (1994); Staff Builders, Inc. v. Armstrong, 37 Ohio St.3d 298, 303, 525 N.E.2d 783 (1988).

Intent is not an element of the reasonable justification standard. Zoppo, at 555. An insurer acts in bad faith when it arbitrarily or capriciously denies or delays a valid claim. Hoskins v. Aetna Life Ins. Co., 6 Ohio St.3d 272, 277, 452 N.E.2d 1315 (1983).

The bad faith tort is separate and distinct from breach of contract and carries its own four-year statute of limitations. Ohio Rev. Code § 2305.09.

B. Available Remedies for Bad Faith

Under Ohio law, a policyholder who prevails on a bad faith claim may recover:

1. Contract damages — full policy benefits owed
2. Consequential damages — financial losses flowing from the wrongful denial or delay (e.g., medical debt, repossession, lost business opportunity)
3. Emotional distress damages — recoverable as compensatory damages for bad faith. Eastham v. Nationwide Mut. Ins. Co., 66 Ohio App.3d 843 (1990); LeForge v. Nationwide Mut. Fire Ins. Co., 82 Ohio App.3d 692 (1992)
4. Punitive damages — recoverable upon clear and convincing evidence of actual malice (hatred, ill will, or conscious disregard for the rights and safety of others) or aggravated/egregious fraud. O.R.C. § 2315.21(C); Hoskins, 6 Ohio St.3d at 272. Punitive damages are capped at two times compensatory damages under O.R.C. § 2315.21(D)(2)(a). For individual defendants or small employers, the cap is the lesser of 2x compensatory damages or 10% of net worth, up to $350,000. O.R.C. § 2315.21(D)(2)(b)
5. Attorney's fees — awarded as an element of compensatory damages when punitive damages are warranted. Zoppo, 71 Ohio St.3d at 558
6. Prejudgment interest — available under O.R.C. § 1343.03 where the insurer fails to make a reasonable settlement offer on or before the date the loss is due and payable
7. Regulatory action — complaints with the Ohio Department of Insurance (ODI) for violations of O.R.C. § 3901.21 and Ohio Admin. Code § 3901-1-54

Any attempt to deny, delay, or substantially underpay this meritorious claim will result in the immediate filing of a bad faith action in addition to the underlying UM/UIM contract action.

C. Regulatory Violations to Date

[IF APPLICABLE — DOCUMENT SPECIFIC VIOLATIONS OF OHIO ADMIN. CODE § 3901-1-54:]

☐ Failure to acknowledge the claim within 15 days per Ohio Admin. Code § 3901-1-54(F)(2)
☐ Failure to accept or deny the claim within 21 days of proof of loss per § 3901-1-54(G)(1)
☐ Failure to provide status updates every 45 days during extended investigation per § 3901-1-54(G)(1)
☐ Failure to provide written basis for denial citing specific policy provisions per § 3901-1-54(G)(2)
☐ Failure to respond to claimant communications within 15 days per § 3901-1-54(F)(3)
☐ Other: [________________________________]

IX. ARBITRATION PROVISIONS

A. Policy Arbitration Clause

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

[IF ARBITRATION CLAUSE EXISTS — INSERT VERBATIM POLICY LANGUAGE:]

[________________________________]

B. Arbitration Demand (If Applicable)

Should [CARRIER_SHORT_NAME] decline this demand, we hereby put you on notice of our intent to invoke any applicable arbitration clause in the policy. Alternatively, we will file suit in the appropriate Ohio court of common pleas.

X. DEMAND AND RESPONSE DEADLINE

A. Monetary Demand

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

Our client's total damages of $[________________] vastly exceed all available coverage. The tortfeasor's policy has been or will be exhausted. This is a clear policy limits case.

B. Response Deadline

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

This is a [____]-day demand. We require [CARRIER_SHORT_NAME]'s written response — either accepting this demand or providing a written denial with specific citation to the policy provision(s) and factual basis for any denial, as required by Ohio Admin. Code § 3901-1-54(G)(2) — no later than the above deadline.

C. Consequences of Non-Response or Rejection

If [CARRIER_SHORT_NAME] fails to accept this demand by the deadline:

1. We will file suit in the Ohio Court of Common Pleas, [________________________________] County, asserting claims for breach of the UM/UIM contract and the tort of bad faith
2. We will seek all compensatory, consequential, and punitive damages available under Ohio law, including attorney's fees
3. We will seek prejudgment interest under O.R.C. § 1343.03
4. We will file a complaint with the Ohio Department of Insurance (ODI), 50 W. Town Street, Suite 300, Columbus, OH 43215, phone: (800) 686-1526, website: insurance.ohio.gov
5. We will invoke any applicable arbitration clause in the policy

XI. DOCUMENT PRESERVATION NOTICE

This letter constitutes formal notice to [CARRIER_SHORT_NAME] to immediately preserve all documents and electronically stored information (ESI) related to this claim, including without limitation:

• The complete claim file in all versions and formats
• All adjuster notes, diary entries, and activity logs
• All internal communications concerning this claim or this policyholder
• All communications with the insured/claimant
• Reserve information and all reserve change documentation
• Claim handling guidelines, procedures, and training materials applicable to UM/UIM claims
• All photographs, inspection reports, and expert evaluations
• Quality assurance and audit materials related to this claim

Failure to preserve these materials may result in spoliation sanctions in subsequent litigation.

XII. CONCLUSION

This claim presents clear facts: our client, your own insured, suffered serious injuries caused by a [tortfeasor with no insurance / tortfeasor who was underinsured]. The coverage was purchased precisely for this situation. Ohio law requires [CARRIER_SHORT_NAME] to honor that coverage fairly and promptly.

We urge [CARRIER_SHORT_NAME] to evaluate this claim in good faith and tender the policy limits to which our client is entitled under Ohio law. We stand ready to provide any additional documentation reasonably necessary to evaluate this demand.

Respectfully submitted,

[________________________________]

By: _______________________________
[________________________________]
Ohio Bar No. [________]
[________________________________]
[________________________________], OH [________]
Telephone: [________________________________]
Email: [________________________________]

Counsel for [________________________________]

ENCLOSURES:

• Policy declarations page and UM/UIM endorsement
• Police / Ohio Traffic Crash Report No. [________________________________]
• Medical records and itemized bills (complete)
• Wage loss documentation
• Photographs of collision scene and vehicles
• Proof of tortfeasor's insurance status / policy limits
• Expert reports (if applicable)
• Permanent impairment rating report

CC:

• [________________________________] (Client)
• [________________________________] (Tortfeasor's carrier — re: consent to settle)

OHIO UM/UIM LAW QUICK REFERENCE

SOURCES AND REFERENCES

• O.R.C. § 3937.18 — UM/UIM coverage: https://codes.ohio.gov/ohio-revised-code/section-3937.18
• O.R.C. § 4509.01 — Financial responsibility: https://codes.ohio.gov/ohio-revised-code/section-4509.01
• O.R.C. § 2315.21 — Punitive damages: https://codes.ohio.gov/ohio-revised-code/section-2315.21
• O.R.C. § 3901.21 — Unfair claims practices: https://codes.ohio.gov/ohio-revised-code/section-3901.21
• Ohio Admin. Code § 3901-1-54 — Claims handling: https://codes.ohio.gov/ohio-administrative-code/rule-3901-1-54
• Zoppo v. Homestead Ins. Co., 71 Ohio St.3d 552, 644 N.E.2d 397 (1994)
• Hoskins v. Aetna Life Ins. Co., 6 Ohio St.3d 272, 452 N.E.2d 1315 (1983)
• Scott-Pontzer v. Liberty Mut. Fire Ins. Co., 85 Ohio St.3d 660, 710 N.E.2d 1116 (1999)
• Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, 797 N.E.2d 1256 (2003)
• Littrell v. Wigglesworth, 91 Ohio St.3d 425, 2001-Ohio-87, 746 N.E.2d 1077 (2001)
• Ohio Department of Insurance: https://insurance.ohio.gov
• OACTA Quarterly Review, "A Brief History of Ohio UM/UIM Laws," Adam E. Carr, Esq. (Fall 2022)