UM/UIM Demand Letter - Oklahoma

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Oklahoma

[LAW FIRM LETTERHEAD]

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION — FOR RESOLUTION PURPOSES ONLY
PROTECTED UNDER 12 O.S. § 2408 AND FED. R. EVID. 408

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

Date: [__/__/____]

[________________________________] (Insurer)
[________________________________]
[________________________________], [__] [________]

Attention: [________________________________], UM/UIM Claims Adjuster
Re: POLICY LIMITS DEMAND — 36 O.S. § 3636 UM/UIM CLAIM
Insured/Claimant: [________________________________]
Policy Number: [________________________________]
Claim Number: [________________________________]
Date of Loss: [__/__/____]
Location of Loss: [________________________________], Oklahoma
UM/UIM Policy Limits: $[________] per person / $[________] per accident
Tortfeasor: [________________________________]
Tortfeasor's Liability Carrier: [________________________________]
Tortfeasor's Liability Limits: $[________]/$[________] (Oklahoma minimums: $25,000/$50,000)
Response Deadline: [__/__/____] at 5:00 p.m. Central Time

Dear [________________________________]:

I. INTRODUCTION AND NATURE OF DEMAND

This firm represents [________________________________] ("our client" or "the Insured") in connection with a claim for uninsured/underinsured motorist benefits under a policy issued by [________________________________] ("the Company") pursuant to 36 O.S. § 3636. This letter constitutes a formal demand for payment of the full UM/UIM policy limits of $[________] arising from the motor vehicle collision that occurred on [__/__/____] in [________________________________] County, Oklahoma.

Oklahoma's UM/UIM statute, 36 O.S. § 3636, was enacted to protect Oklahoma motorists from the reality that the state's minimum financial responsibility limits — $25,000 per person and $50,000 per accident under 47 O.S. § 7-204 — are woefully inadequate to compensate seriously injured victims. Our client's damages vastly exceed the tortfeasor's available liability coverage, triggering the Company's obligation to make its insured whole.

This claim presents undisputed liability, catastrophic damages, and a clear obligation under Oklahoma law. The Company's handling of this claim will be judged against the demanding standards articulated by the Oklahoma Supreme Court in Christian v. American Home Assurance Co., 1977 OK 141, 577 P.2d 899 — the landmark decision that made Oklahoma one of the first states in the nation to recognize the tort of insurance bad faith.

II. OKLAHOMA UM/UIM LAW AND COVERAGE FRAMEWORK

A. Mandatory Offer Under 36 O.S. § 3636

Oklahoma law requires every automobile liability insurer doing business in this state to offer uninsured motorist coverage to every named insured in limits equal to the bodily injury liability limits on the policy. Under 36 O.S. § 3636(B):

"No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be issued, delivered, renewed, or extended in this state... unless the policy includes the coverage described in subsection B of this section."

A named insured may only reject UM/UIM coverage (or elect lower limits) through a signed written rejection on a form approved by the Oklahoma Insurance Commissioner. Absent such written rejection, coverage is imposed by operation of law at limits equal to the bodily injury liability limits. See 36 O.S. § 3636(G).

B. Anti-Stacking and Dollar-for-Dollar Setoff

Oklahoma permits stacking of UM/UIM coverages across multiple vehicles on the same policy unless expressly precluded by policy language that conforms to statutory requirements. See Shepard v. Farmers Ins. Co., 1983 OK 103, 678 P.2d 250. The Company must tender the full stacked limits if the policy contains multiple covered vehicles.

UIM benefits are calculated on a gap-filling basis — the tortfeasor's paid liability limits are subtracted from the insured's total damages, and the Company must pay up to its UIM limits for the remainder.

C. Policy and Coverage Summary

D. Coverage Trigger

The tortfeasor qualifies as an underinsured motorist under 36 O.S. § 3636(C) because the tortfeasor's liability limits of $[________] are insufficient to fully compensate our client for damages sustained. Specifically:

☐ Our client has exhausted or will exhaust the tortfeasor's bodily injury liability limits
☐ Our client's documented damages exceed $[________], far exceeding available liability coverage
☐ The tortfeasor has no additional assets that can reasonably be pursued
☐ Our client has complied with all notice, cooperation, and consent-to-settle provisions of the policy

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, Oklahoma.

[DETAILED NARRATIVE OF COLLISION — INCLUDE ROADWAY CONDITIONS, WEATHER, TRAFFIC CONTROLS, DIRECTION OF TRAVEL, AND POINT OF IMPACT]

B. The Tortfeasor's Negligence

[________________________________] ("the Tortfeasor") was negligent as a matter of Oklahoma law in one or more of the following respects:

☐ Failure to maintain proper lookout
☐ Failure to yield right-of-way (47 O.S. § 11-401 et seq.)
☐ Following too closely (47 O.S. § 11-310)
☐ Exceeding posted speed limit (47 O.S. § 11-801)
☐ Disregarding traffic control device (47 O.S. § 11-202)
☐ Improper lane change (47 O.S. § 11-309)
☐ Driving under the influence (47 O.S. § 11-902) — negligence per se
☐ Texting/distracted driving (47 O.S. § 11-901d)
☐ Reckless driving (47 O.S. § 11-901)
☐ Other: [________________________________]

C. Evidence of Liability

1. Oklahoma Traffic Collision Report
Prepared by [________________________________] Police Department / Oklahoma Highway Patrol, Report No. [________________________________], completed by Officer [________________________________], Badge No. [________]. The investigating officer concluded [________________________________].

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

3. Physical Evidence
Point-of-impact analysis, skid marks, debris field, and damage patterns all confirm the Tortfeasor's fault.

4. Expert Analysis
[________________________________], accident reconstructionist, has concluded that the Tortfeasor was the sole proximate cause of this collision.

D. Freedom from Comparative Fault

Under Oklahoma's modified comparative negligence regime codified at 23 O.S. § 13, a plaintiff may recover so long as his or her negligence does not exceed 50% (the "51% bar"). Here, our client bears zero percent (0%) comparative fault. The investigating officer assigned no fault to our client, and no evidence exists to suggest otherwise.

IV. OUR CLIENT'S INJURIES AND TREATMENT

A. Injury Summary

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

Primary Injuries:

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

Secondary Injuries:

• [________________________________]
• [________________________________]

B. Treatment Timeline

C. Current Condition and Prognosis

[NARRATIVE OF CURRENT CONDITION, LIMITATIONS, AND EXPECTED FUTURE TREATMENT]

D. Permanent Impairment

Our client has been assigned the following AMA Guides impairment ratings by [________________________________], M.D.:

V. DAMAGES

A. Past Medical Expenses

Under Oklahoma law, our client is entitled to recover the full reasonable value of medical services rendered. See 12 O.S. § 3009.1 (collateral source statute allows recovery of amounts billed and paid).

B. Future Medical Expenses (Present Value)

C. Lost Wages and Lost Earning Capacity

Past Lost Wages: $[________]
(Calculation: [________________________________])

Future Lost Earning Capacity (Present Value): $[________]
(Economist report by [________________________________] attached)

D. Non-Economic Damages

Oklahoma permits full recovery of non-economic damages in bodily injury cases. The $350,000 non-economic damages cap previously codified at 23 O.S. § 61.2 was struck down as unconstitutional special legislation by the Oklahoma Supreme Court in Beason v. I.E. Miller Services, Inc., 2019 OK 28, 441 P.3d 1107. There is therefore no statutory cap on our client's non-economic damages.

Our client has endured and will continue to endure:

• Physical pain and suffering
• Mental anguish and emotional distress
• Loss of enjoyment of life
• Disfigurement and scarring
• Permanent disability and impairment

Non-Economic Damages: $[________]

E. Damages Summary

VI. SETTLEMENT WITH TORTFEASOR'S LIABILITY CARRIER AND CONSENT TO SETTLE

A. Status of Third-Party Settlement

We [☐ have reached / ☐ are pursuing] a tender of policy limits in the amount of $[________] from [________________________________] on behalf of the Tortfeasor.

B. Request for Written Consent to Settle and Waiver of Subrogation

Pursuant to the policy and Oklahoma law, we hereby formally request that the Company:

1. Consent in writing to our client's settlement with the liability carrier for the full tendered limits; and
2. Waive any subrogation rights the Company may assert against the Tortfeasor.

Please provide written consent within thirty (30) days of receipt of this letter. Failure to timely respond will be deemed consent. The Company cannot unreasonably withhold consent, and any delay in responding may itself constitute bad faith under Oklahoma law. See Newport v. USAA, 2000 OK 59, 11 P.3d 190.

VII. CALCULATION AND DEMAND FOR UM/UIM BENEFITS

A. Gap Calculation

B. Formal Policy Limits Demand

We hereby demand payment of the FULL UM/UIM policy limits of $[________] within thirty (30) days of receipt of this letter.

This is a clear policy limits case. Our client's documented damages of $[________] vastly exceed any available coverage. There is no reasonable basis for the Company to offer anything less than its full limits under Oklahoma law.

VIII. NOTICE OF BAD FAITH CLAIM AND OKLAHOMA LEGAL STANDARDS

The Company owes our client — its own insured — the duty of good faith and fair dealing recognized by the Oklahoma Supreme Court in Christian v. American Home Assurance Co., 1977 OK 141, 577 P.2d 899 (one of the earliest bad faith decisions in the nation). This duty is implied-in-law in every Oklahoma insurance contract and its violation sounds in tort, not merely contract.

A. The Buzzard Standard

Under Buzzard v. Farmers Insurance Co., 1991 OK 127, 824 P.2d 1105, the Oklahoma Supreme Court held that the decisive question in a bad faith action is whether the insurer had a "good faith belief, at the time its performance was requested, that it had justifiable reason for withholding payment under the policy." A post-denial rationalization is not a defense.

B. Statutory Violations — Unfair Claims Settlement Practices Act

Any denial, delay, or lowball offer on this claim will also constitute violations of the Oklahoma Unfair Claims Settlement Practices Act, 36 O.S. § 1250.1 et seq., including but not limited to 36 O.S. § 1250.5's prohibitions against:

• Misrepresenting pertinent facts or policy provisions
• Failing to acknowledge and act reasonably promptly on claim communications
• Failing to adopt and implement reasonable standards for prompt investigation
• Refusing to pay claims without conducting a reasonable investigation
• Not attempting in good faith to effectuate prompt, fair, and equitable settlement where liability is reasonably clear
• Compelling insureds to institute litigation by offering substantially less than amounts ultimately recovered
• Failing to promptly provide a reasonable explanation for denial or offer

C. Punitive Damages Under 23 O.S. § 9.1

Oklahoma law expressly authorizes punitive damages against insurers who breach the duty of good faith. Under 23 O.S. § 9.1, punitive damages fall into three categories:

Category I: Reckless disregard — capped at the greater of $100,000 or actual damages.

Category II: Intentional and malicious breach of duty of good faith — capped at the greatest of $500,000, twice actual damages, or the increased financial benefit derived by the insurer.

Category III: Intentional/malicious conduct that is life-threatening to humans (found beyond a reasonable doubt by the court) — no cap. The jury may award any amount it deems appropriate.

Notably, Section 9.1 specifically references insurer bad faith as a basis for Category II and III punitive awards.

D. Available Remedies

Upon filing suit, our client will seek:

• Full contract benefits plus prejudgment interest at the statutory rate (12 O.S. § 727.1)
• Consequential and incidental damages
• Emotional distress damages
• Attorney fees as consequential damages (see McCorkle v. Great Atlantic Ins. Co., 1981 OK 128)
• Punitive damages under 23 O.S. § 9.1 (Categories I, II, or III)
• Costs of litigation

E. Discovery of Claim File

Oklahoma courts permit broad discovery of the insurer's entire claim file in bad faith litigation, including adjuster notes, reserves, internal communications, supervisor approvals, training manuals, and claim-handling guidelines. See Brown v. Patel, 2007 OK 16, 157 P.3d 117. This discovery will illuminate every internal communication the Company has made about this claim.

IX. ARBITRATION / LITIGATION POSTURE

A. Policy Arbitration Clause

The policy [☐ contains / ☐ does not contain] an arbitration clause governing UM/UIM disputes. If applicable, we hereby demand binding arbitration under the clause and Oklahoma's Uniform Arbitration Act, 12 O.S. § 1851 et seq.

B. Venue for Litigation

If this matter proceeds to suit, venue is proper in [________________________________] County District Court pursuant to 12 O.S. § 137, where the collision occurred and where our client resides. Oklahoma courts also have jurisdiction under 12 O.S. § 2004(F).

X. STATUTE OF LIMITATIONS NOTICE

The contract claim for UM/UIM benefits is governed by the five-year statute of limitations under 12 O.S. § 95(A)(1), running from the date of the insurer's breach. The tort of bad faith is subject to the two-year statute under 12 O.S. § 95(A)(3). Our client will not permit either period to be eroded by delay.

XI. RESPONSE DEADLINE AND CONSEQUENCES

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

Consequences of Non-Payment

If the Company fails to tender the full policy limits of $[________] by the deadline:

1. Litigation will be filed in [________________________________] County District Court seeking full contract benefits, bad faith damages, and punitive damages under 23 O.S. § 9.1.

2. Regulatory complaint will be filed with the Oklahoma Insurance Department (OID), 400 NE 50th Street, Oklahoma City, OK 73105, Consumer Assistance Hotline: 1-800-522-0071.

3. Broad discovery will be served covering the entire claim file, reserves, reinsurance communications, training materials, and performance-based compensation structures.

4. Time-limited demand evidence will be preserved for use at trial to establish bad faith refusal.

XII. DOCUMENT PRESERVATION NOTICE

This letter serves as formal notice to preserve all documents and electronically stored information ("ESI") related to this claim, including but not limited to:

• The complete claim file (paper and electronic) in native format
• All internal and external correspondence regarding this claim
• Adjuster notes, diaries, and activity logs
• Reserve information and all reserve change documentation
• Supervisor and manager notes and approvals
• All internal communications (email, instant messages, voicemails)
• Claim handling guidelines, manuals, and procedures in effect on the date of loss
• Training materials regarding UM/UIM claims
• Vendor reports (IME, biomechanics, medical bill reviews)
• Reinsurance communications
• Performance metrics, quotas, and compensation structures for this adjuster

XIII. CONCLUSION

This claim presents undisputed liability, catastrophic injuries, and damages that vastly exceed available liability and UIM coverage combined. The Oklahoma Supreme Court recognized the tort of bad faith in Christian nearly fifty years ago precisely to deter insurer conduct of the sort this claim invites if not promptly and fairly resolved.

We urge the Company to tender the full UM/UIM policy limits of $[________] within thirty (30) days and avoid the substantial exposure that will attend any other course.

Respectfully submitted,

[________________________________] (Law Firm)

By: _______________________________
[________________________________]
OBA No. [________]
[________________________________]
[________________________________], Oklahoma [________]
Telephone: [________________________________]
Email: [________________________________]

Counsel for [________________________________]

ENCLOSURES:

• Policy declarations page and UM/UIM endorsement
• Oklahoma Traffic Collision Report
• Medical records and itemized bills (Bates [________]-[________])
• Wage loss documentation
• Expert reports
• Photographs
• Impairment rating report

CC:

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

OKLAHOMA UM/UIM LAW QUICK REFERENCE

SOURCES AND REFERENCES

• Oklahoma Statutes Title 36, Chapter 36 (Insurance Code): https://law.justia.com/codes/oklahoma/title-36/
• 36 O.S. § 3636 (UM/UIM Coverage): https://law.justia.com/codes/oklahoma/title-36/section-36-3636/
• 36 O.S. § 1250.1 et seq. (Unfair Claims Settlement Practices Act): https://law.justia.com/codes/oklahoma/title-36/
• 23 O.S. § 9.1 (Punitive Damages): https://law.justia.com/codes/oklahoma/title-23/section-23-9-1/
• 23 O.S. § 13 (Modified Comparative Negligence): https://law.justia.com/codes/oklahoma/title-23/section-23-13/
• Christian v. American Home Assurance Co., 1977 OK 141, 577 P.2d 899: https://www.oscn.net/
• Buzzard v. Farmers Insurance Co., 1991 OK 127, 824 P.2d 1105: https://www.oscn.net/
• Newport v. USAA, 2000 OK 59, 11 P.3d 190: https://www.oscn.net/
• Beason v. I.E. Miller Services, Inc., 2019 OK 28, 441 P.3d 1107: https://www.oscn.net/
• Oklahoma Insurance Department: https://www.oid.ok.gov/
• Oklahoma Bar Association Journal, "Oklahoma's Uninsured Motorist Coverage Statute": https://www.okbar.org/barjournal/oct2017/obj8827goeres/