UM/UIM Demand Letter - Oregon

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Oregon

[LAW FIRM LETTERHEAD]

CONFIDENTIAL SETTLEMENT COMMUNICATION
PROTECTED FROM ADMISSIBILITY UNDER OREGON EVIDENCE CODE (OEC) 408 / ORS 40.190 AND FED. R. EVID. 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 — ORS 742.500–742.506
Insured/Claimant: [________________________________]
Policy Number: [________________________________]
Claim Number: [________________________________]
Date of Loss: [__/__/____]
Location of Loss: [________________________________] (Oregon)
UM/UIM Policy Limits: $[____] per person / $[____] per accident
Tortfeasor: [________________________________]
Tortfeasor's Liability Carrier: [________________________________]
Tortfeasor's Bodily Injury Limits: $[____]
Response Deadline: [__/__/____] at 5:00 p.m. Pacific

Dear [ADJUSTER_NAME]:

I. INTRODUCTION

This firm represents [CLIENT_NAME] ("our client") on a claim for uninsured/underinsured motorist (UM/UIM) benefits arising from a motor vehicle collision that occurred on [__/__/____] in [COUNTY] County, Oregon. Oregon law required [INSURANCE_COMPANY_NAME] to include UM/UIM coverage on our client's policy pursuant to ORS 742.502, and that coverage was purchased, paid for, and is fully applicable to this loss.

This letter is a formal policy-limits demand under ORS 742.500 to 742.506 for payment of the full UM/UIM limits of $[____]. Our client's damages substantially exceed the available liability coverage of the tortfeasor and the available UM/UIM coverage under your policy. This matter must resolve within the limits, promptly and in good faith, to avoid exposure under ORS 742.061 (attorney fees) and ORS 746.230 (Unfair Claim Settlement Practices).

II. OREGON UM/UIM STATUTORY FRAMEWORK

A. Mandatory Coverage and Minimum Limits

Under ORS 742.502(1), every motor vehicle liability policy issued in Oregon must provide uninsured motorist coverage, and every offer of UM coverage must include underinsurance (UIM) coverage for bodily injury or death caused by a motor vehicle with liability limits less than the insured is legally entitled to recover. The statutory minimum is $25,000 per person / $50,000 per accident pursuant to ORS 806.070 (financial responsibility), and UM/UIM limits must match the insured's bodily injury liability limits unless the named insured has affirmatively elected lower limits in writing — which must not fall below the $25,000/$50,000 floor.

B. Model UM/UIM Provisions — ORS 742.504

ORS 742.504 sets forth the model UM/UIM provisions that every Oregon policy must equal or exceed. Under ORS 742.504, Oregon law allows only variations from the statutory model that are neutral or more favorable to the insured; any attempt by a carrier to narrow coverage below the statutory model is void. This includes, among many others:

• "Accident" and "bodily injury" defined liberally in favor of coverage;
• Stacking and anti-stacking provisions construed against the insurer;
• Arbitration of UM/UIM disputes as the default dispute resolution mechanism;
• The insurer's subrogation rights against the tortfeasor, subject to the insured being made whole;
• Offset for tortfeasor payments (the UIM limit is reduced by amounts paid by or on behalf of the tortfeasor — ORS 742.504(7)(c)).

C. UIM Trigger — ORS 742.502(2)(a)

UIM coverage is triggered when the tortfeasor has liability insurance less than the insured is legally entitled to recover. This is a damages-comparison test, not a limits-comparison test. Our client's damages, as set forth below, exceed the tortfeasor's policy limits of $[____], triggering full UIM coverage under ORS 742.502.

D. Policy Information

III. THE COLLISION AND LIABILITY

A. The Collision

On [__/__/____], at approximately [__:__ __], our client was lawfully [operating / occupying / a passenger in / a pedestrian near] a vehicle at or near [________________________________], [CITY], Oregon. [DETAILED_NARRATIVE_OF_COLLISION]

B. Tortfeasor's Negligence

[TORTFEASOR_NAME] was negligent and committed traffic violations under the Oregon Vehicle Code, including:

☐ Failure to maintain a proper lookout (ORS 811.235)
☐ Failure to yield right-of-way (ORS 811.260 et seq.)
☐ Following too closely (ORS 811.485)
☐ Careless driving (ORS 811.135)
☐ Reckless driving (ORS 811.140)
☐ DUII (ORS 813.010)
☐ Speeding / basic rule violation (ORS 811.100)
☐ Failure to obey traffic control device (ORS 811.265)
☐ Improper lane change / failure to signal (ORS 811.375, 811.400)
☐ Distracted driving — mobile electronic device (ORS 811.507)
☐ Other: [________________________________]

C. Evidence of Liability

1. Oregon Traffic Crash Report — [AGENCY] Report No. [________] (officer's narrative and any citations issued to [TORTFEASOR_NAME]);
2. Witness statements from [____] independent witnesses;
3. Physical evidence — point of impact, debris field, skid marks, vehicle damage consistent with our client's account;
4. [Expert accident reconstruction, if applicable] — [EXPERT_NAME], [CREDENTIALS], who has concluded [________________________________].

D. Oregon Comparative Fault — ORS 31.600

Oregon follows modified comparative fault under ORS 31.600: a plaintiff may recover provided the plaintiff's fault is not greater than the combined fault of all defendants (the "51% bar" — the plaintiff is barred only at 51% or more of fault). Our client bears no comparative fault for this collision. The tortfeasor is 100% at fault.

IV. INJURIES, TREATMENT, AND PROGNOSIS

A. Injury Summary

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

• [INJURY_1]
• [INJURY_2]
• [INJURY_3]

B. Treatment Chronology

C. PIP Coordination

Our client's PIP benefits under ORS 742.520 (mandatory $15,000 medical/$3,000 wage loss minimums) have been [exhausted / partially exhausted / in the amount of $[____]]. Under ORS 742.544 and ORS 742.534, any PIP subrogation/reimbursement claim is subject to the "made-whole" doctrine and must not impair our client's UIM recovery.

D. Current Condition and Prognosis

[DESCRIBE_CURRENT_CONDITION_PROGNOSIS_MMI_PERMANENCY]

V. DAMAGES

A. Past Medical Expenses

B. Future Medical Expenses (Present Value)

C. Past and Future Lost Earnings

D. Non-Economic Damages

Under Oregon law, our client is entitled to recover non-economic damages for pain and suffering, mental and emotional distress, loss of enjoyment of life, interference with normal activities, and inconvenience. Note that Oregon's prior $500,000 cap on non-economic damages (former ORS 31.710) has been substantially narrowed by the Oregon Supreme Court, and the cap does not apply to personal injury claims not subject to statutory limits. [________________________________]

E. Damages Summary

VI. TORTFEASOR SETTLEMENT AND CONSENT

Our client [has settled / intends to settle] with [TORTFEASOR_CARRIER] for the tortfeasor's policy limits of $[____]. Pursuant to the model UM/UIM provisions in ORS 742.504 and the terms of the policy, we hereby request written consent to settle with the tortfeasor's liability carrier and preserve any subrogation rights your company may have.

Please provide written consent (or a substitution of payment pursuant to the policy's substitution provision) within thirty (30) days of this letter. Silence or unreasonable delay will be construed as a waiver of subrogation and consent to the underlying settlement. See ORS 742.504(7)(b).

VII. UIM BENEFITS CALCULATION AND POLICY-LIMITS DEMAND

We hereby demand tender of the full UM/UIM per-person limit of $[____]. Our client's documented damages of $[____] vastly exceed the combined liability and UIM coverage available. This is a textbook policy-limits case under Oregon law.

VIII. ATTORNEY FEES UNDER ORS 742.061

ORS 742.061(1) provides that if settlement is not made within six (6) months from the date proof of loss is filed, and an action is brought on the policy in which the plaintiff's recovery exceeds any tender by the insurer, reasonable attorney fees shall be taxed as costs in favor of the insured. This is a mandatory fee-shifting statute applicable to first-party UM/UIM claims. Oregon appellate courts have interpreted ORS 742.061 broadly in favor of insureds (see Long v. Farmers Ins. Co., 360 Or. 791 (2017)).

ORS 742.061(3) contains the only statutory "safe harbor" — the insurer may avoid fees in a UM/UIM case only by (a) accepting coverage within six months of proof of loss, (b) confining disputed issues to liability of the uninsured/underinsured motorist and the amount of damages, and (c) consenting in writing that the only remaining issues may be submitted to binding arbitration. If [INSURANCE_COMPANY_NAME] has not provided a written safe-harbor notice conforming to ORS 742.061(3), the attorney fee exposure is fully in play.

Proof of loss was provided to [INSURANCE_COMPANY_NAME] on [__/__/____]. The six-month clock expires on [__/__/____].

IX. BAD FAITH / ORS 746.230 AND MOODY WARNING

A. Oregon's Unfair Claim Settlement Practices Act — ORS 746.230

ORS 746.230(1) prohibits, among other conduct:

• (a) Misrepresenting facts or policy provisions at issue;
• (b) Failing to acknowledge and act promptly on communications concerning claims;
• (c) Failing to adopt and implement reasonable standards for prompt investigation;
• (d) Refusing to pay claims without conducting a reasonable investigation;
• (e) Failing to affirm or deny coverage within a reasonable time after proof of loss;
• (f) Not attempting in good faith to promptly and equitably settle claims where liability has become reasonably clear;
• (g) Compelling claimants to initiate litigation to recover amounts due by offering substantially less than amounts ultimately recovered.

B. Moody v. Oregon Community Credit Union — Bad Faith in Oregon

Oregon historically limited insureds' remedies to contract damages. That era is over. In Moody v. Oregon Community Credit Union, 371 Or. 772 (2023), the Oregon Supreme Court held that an insurer's violation of ORS 746.230 can support a common-law negligence per se claim by the insured, including recovery of emotional distress damages — without the traditional physical-impact requirement. Post-Moody decisions (Butters v. Travelers, Hinzman v. Foremost, Mohammad v. Liberty Insurance, and others) have applied this framework to deny insurer motions to dismiss negligence per se and extracontractual claims grounded in ORS 746.230.

Earlier authority, including Farris v. U.S. Fidelity & Guaranty Co., 284 Or. 453 (1978), and Employers' Fire Ins. Co. v. Love It Ice Cream Co., 64 Or. App. 784 (1983), previously restricted emotional distress and bad faith recovery; the Moody court effectively narrowed Farris to its facts and made clear that legislative enactment of ORS 746.230 reflects an intent to protect insureds from the types of harm that follow bad-faith claim handling.

C. Georgetown Realty and Special Relationship

In Georgetown Realty, Inc. v. Home Ins. Co., 313 Or. 97, 831 P.2d 7 (1992), the Oregon Supreme Court recognized that the insurer-insured relationship is one of "special reliance" giving rise to duties beyond the mere contract when the insurer undertakes the defense. That duty, combined with Moody, creates substantial extracontractual exposure for insurers who mishandle UM/UIM claims.

D. Consequences of Bad Faith Handling

If [INSURANCE_COMPANY_NAME] fails to tender the limits in good faith, we will pursue:

1. Full UM/UIM policy benefits;
2. Attorney fees pursuant to ORS 742.061;
3. 9% statutory interest under ORS 82.010 from the date payment was due;
4. Negligence per se damages under Moody, including emotional distress;
5. Where clear and convincing evidence of malice or reckless indifference exists, punitive damages under ORS 31.730 — noting that 70% of any punitive award is paid to the State (60% to the Criminal Injuries Compensation Account of the Department of Justice Crime Victims' Services Division, 10% to the State Court Facilities and Security Account) per ORS 31.735, and 30% to the plaintiff; and
6. A regulatory complaint with the Oregon Division of Financial Regulation (Department of Consumer and Business Services), P.O. Box 14480, Salem, OR 97309-0405.

X. ARBITRATION UNDER ORS 742.504(10)

Pursuant to the model provisions in ORS 742.504(10), disagreements between the insured and insurer regarding whether the insured is legally entitled to recover damages and, if so, the amount, are resolved by arbitration upon demand of either party. If [INSURANCE_COMPANY_NAME] does not tender the policy limits by the deadline below, we will exercise our client's right to demand binding arbitration and will select [ARBITRATOR_NAME] as our client's arbitrator.

XI. RESPONSE DEADLINE

This demand expires at 5:00 p.m. Pacific on [__/__/____].

If [INSURANCE_COMPANY_NAME] has not tendered the full UM/UIM per-person policy limits of $[____] by that time, we will:

1. File suit in the Circuit Court of the State of Oregon for [COUNTY] County seeking policy benefits, statutory interest, and attorney fees under ORS 742.061;
2. Pursue negligence per se claims under Moody for emotional distress and consequential damages;
3. File a formal complaint with the Oregon Division of Financial Regulation; and
4. Invoke arbitration under ORS 742.504(10) if applicable.

XII. DOCUMENT PRESERVATION NOTICE

You are directed to preserve all claim-related documents and ESI, including the complete claim file, adjuster notes, reserve history, internal communications, supervisor approvals, claim-handling manuals, SIU materials (if any), telephone recordings, and training materials applicable to UM/UIM claims.

XIII. CONCLUSION

Our client purchased UM/UIM coverage from [INSURANCE_COMPANY_NAME] precisely to protect against the financial devastation that follows an underinsured tortfeasor's negligence. That protection must be delivered now — in good faith and without litigation. Oregon's bar is watching, Moody is the law, and ORS 742.061 guarantees our client's right to counsel at your expense if you force us to court.

Respectfully submitted,

[LAW_FIRM_NAME]

By: _______________________________
[ATTORNEY_NAME], OSB # [____]
[ADDRESS]
[CITY], Oregon [ZIP]
[PHONE] | [EMAIL]

Counsel for [CLIENT_NAME]

ENCLOSURES:
☐ Declarations page and full policy
☐ Oregon Traffic Crash Report
☐ Photographs of vehicles and scene
☐ Certified medical records and itemized bills
☐ Wage loss documentation (employer verification / tax returns)
☐ PIP log / exhaustion documentation
☐ Expert reports (if applicable)

CC:

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

OREGON UM/UIM LAW QUICK REFERENCE

SOURCES AND REFERENCES

• ORS 742.500 — Definitions for UM/UIM — https://oregon.public.law/statutes/ors_742.500
• ORS 742.502 — UM coverage; UIM coverage — https://oregon.public.law/statutes/ors_742.502
• ORS 742.504 — Required provisions / model UM/UIM language — https://oregon.public.law/statutes/ors_742.504
• ORS 742.061 — Recovery of attorney fees in action on policy — https://oregon.public.law/statutes/ors_742.061
• ORS 746.230 — Unfair claim settlement practices — https://oregon.public.law/statutes/ors_746.230
• ORS 806.070 — Financial responsibility requirements — https://oregon.public.law/statutes/ors_806.070
• ORS 31.600 — Comparative fault — https://oregon.public.law/statutes/ors_31.600
• ORS 31.730 — Punitive damages standard — https://oregon.public.law/statutes/ors_31.730
• ORS 31.735 — Punitive damages distribution — https://oregon.public.law/statutes/ors_31.735
• ORS 82.010 — Legal rate of interest — https://oregon.public.law/statutes/ors_82.010
• Moody v. Oregon Community Credit Union, 371 Or. 772 (2023) — https://law.justia.com/cases/oregon/supreme-court/2023/s069409.html
• Georgetown Realty, Inc. v. Home Ins. Co., 313 Or. 97 (1992)
• Farris v. U.S. Fidelity & Guaranty Co., 284 Or. 453 (1978)
• Long v. Farmers Ins. Co. of Oregon, 360 Or. 791 (2017) (ORS 742.061 attorney fees)
• Oregon Division of Financial Regulation — https://dfr.oregon.gov/