UM/UIM Demand Letter - Utah

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Utah

[LAW FIRM LETTERHEAD]

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION — PROTECTED UNDER UTAH RULES OF EVIDENCE RULE 408
AND FEDERAL RULE OF EVIDENCE 408

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

Date: [__/__/____]

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

Attention: [________________________________], [________________________________]
Re: FORMAL UM/UIM POLICY LIMITS DEMAND — UTAH LAW
Insured/Claimant: [________________________________]
Policy Number: [________________________________]
Claim Number: [________________________________]
Date of Loss: [__/__/____]
UM/UIM Policy Limits: $[________________________________]
Tortfeasor: [________________________________]
Tortfeasor's Carrier: [________________________________]
Tortfeasor's Limits: $[________________________________]
Demand Response Deadline: [__/__/____] at 5:00 p.m. Mountain Time

Dear [________________________________]:

I. INTRODUCTION AND DEMAND

This firm represents [________________________________] ("our client" or "the Insured") in connection with a claim for [uninsured / underinsured] motorist benefits under [________________________________] Policy No. [________________________________] (the "Policy"). This letter constitutes a formal demand for payment of the full UM/UIM policy limits of $[________________________________] arising from a motor vehicle collision on [__/__/____] in [________________________________], Utah.

Our client's compensable damages substantially exceed the combined available coverage. Utah's UM/UIM statutes exist precisely for circumstances like this — to protect your own insured when a negligent motorist lacks sufficient liability coverage to make the injured party whole.

II. UTAH UM/UIM STATUTORY FRAMEWORK

A. Mandatory Coverage and Written Rejection Requirements

Under Utah Code § 31A-22-305, every automobile liability policy issued or renewed in Utah must include uninsured motorist coverage unless the named insured rejects such coverage in a signed writing on a form approved by the Utah Insurance Commissioner. That form must include a reasonable explanation of the purpose and availability of UM coverage. Any such rejection runs with the policy until the insured affirmatively reinstates coverage in writing.

Under Utah Code § 31A-22-305.3, underinsured motorist coverage must be offered in amounts equal to the liability limits of the policy unless the insured selects lower limits or rejects coverage in the same signed-writing format described above.

[________________________________] never executed a written rejection of UM/UIM coverage. Accordingly, UM/UIM coverage attached to the Policy in the full amount of the applicable liability limits.

B. 2025 Minimum Limits (HB 113)

Effective January 1, 2025, pursuant to HB 113 (2024), Utah's mandatory minimum bodily injury liability and UM/UIM limits are:

Policies issued or renewed on or after January 1, 2025 must meet these minimums. The Insured's Policy [________________________________] was [issued / renewed] on [__/__/____] and is therefore subject to these 2025 minimums.

C. Anti-Stacking Rule — Utah Code § 31A-22-305(7)

Utah restricts interpolicy stacking. Under § 31A-22-305(7), the limit of liability for UM coverage applicable to two or more motor vehicles may not be added together, combined, or stacked to determine the total coverage available to any one person in any one accident. The UM/UIM policy covering the vehicle occupied by the Insured at the time of loss is primary. Any household policy not covering the occupied vehicle may be reached only as permitted under the statute.

Applicable primary UM/UIM coverage: Policy No. [________________________________], Limit $[________________________________] per person / $[________________________________] per accident.

D. No-Fault / PIP Interaction

Utah operates under a no-fault personal injury protection (PIP) system under Utah Code § 31A-22-307. The minimum statutory PIP benefit is $3,000 per person in medical expenses, plus the lesser of $250 per week or 85% of lost wages (up to 52 weeks), and $20 per day for household services (up to 365 days).

Under Utah Code § 31A-22-309, an insured may sue the at-fault driver (and recover non-economic damages) only if:

☐ Medical expenses exceed $3,000, OR
☐ The accident caused death, OR
☐ The accident caused dismemberment, OR
☐ The accident caused permanent disability or permanent disfigurement

Note: The PIP tort threshold does not apply to UM/UIM claims against the insured's own carrier. Our client's UM/UIM claim is properly presented regardless of PIP threshold status.

Our client [has / has not] met the PIP tort threshold because [________________________________].

E. Modified Comparative Fault — Utah Code § 78B-5-818

Utah applies modified comparative fault with a 50% bar. A claimant is barred from recovery only if his or her fault equals or exceeds 50%. As detailed below, our client bears no more than [____]% comparative fault — well within recovery limits. Any apportionment of fault to our client will correspondingly reduce, but not eliminate, the recoverable damages.

III. COVERAGE ANALYSIS

A. Policy Details

B. Coverage Trigger

For Uninsured Motorist (UM) Claims:

The tortfeasor qualifies as an "uninsured motorist" under Utah Code § 31A-22-305 because:

☐ The tortfeasor carried no liability insurance at the time of the collision
☐ The tortfeasor's insurer denied coverage
☐ The tortfeasor's insurer is insolvent
☐ The tortfeasor fled the scene and cannot be identified (hit-and-run)
☐ The tortfeasor's liability limits are below the Utah statutory minimums

For Underinsured Motorist (UIM) Claims:

The tortfeasor qualifies as an "underinsured motorist" under Utah Code § 31A-22-305.3 because:

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

IV. FACTS OF THE COLLISION

A. Description of the Incident

On [__/__/____], at approximately [____]:[____] [a.m./p.m.], our client was [________________________________] at or near [________________________________], [________________________________], Utah (the "Location").

[________________________________] [________________________________] [________________________________] [________________________________]

[Describe the collision: direction of travel, road conditions, weather, traffic control devices, sequence of events, point of impact, post-impact positions of vehicles.]

B. Tortfeasor's Negligence Under Utah Law

The tortfeasor, [________________________________], breached the following duties of care:

☐ Failure to maintain proper lookout (Utah Code § 41-6a-401)
☐ Failure to yield right-of-way (Utah Code § 41-6a-901 et seq.)
☐ Following too closely (Utah Code § 41-6a-711)
☐ Unsafe speed for conditions (Utah Code § 41-6a-601)
☐ Distracted driving / handheld device (Utah Code § 41-6a-1716)
☐ Failure to obey traffic control device (Utah Code § 41-6a-301)
☐ Improper lane change (Utah Code § 41-6a-709)
☐ Driving under the influence (Utah Code § 41-6a-502)
☐ [________________________________]

C. Evidence of Liability

1. Police / Crash Report
[________________________________] Police/Sheriff's Crash Report, Report No. [________________________________], dated [__/__/____], documents the collision and identifies the tortfeasor as the at-fault party.

2. Witness Statements
[____] independent witnesses corroborate our client's account of the collision. Statements are enclosed.

3. Physical / Electronic Evidence
Vehicle damage patterns, debris field, skid marks, and [________________________________] camera / dashcam footage establish the sequence of impact.

4. Expert Analysis
[________________________________], certified accident reconstructionist, opined that [________________________________] based on a review of [________________________________]. Expert report enclosed.

5. Tortfeasor Admissions
[Describe any admissions, citations, or guilty plea by the tortfeasor.]

D. Client's Comparative Fault

Under Utah Code § 78B-5-818, our client bears zero (or no more than [____]%) comparative fault. [________________________________] [Describe facts supporting low or zero fault allocation.]

V. INJURIES AND MEDICAL TREATMENT

A. Mechanism of Injury

The collision subjected our client to [________________________________] forces, producing the injuries described below.

B. Diagnosed Injuries

Primary Injuries:

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

Secondary / Comorbid Conditions Aggravated:

• [________________________________]

C. Treatment Timeline

D. Current Condition and Prognosis

[________________________________] [Describe current functional limitations, ongoing treatment, future surgical needs, and long-term prognosis.]

E. Permanent Impairment Rating

Impairment rated by [________________________________], M.D., [________________________________], in report dated [__/__/____] (enclosed).

VI. DAMAGES

A. Past Medical Expenses

B. Future Medical Expenses (Present Value)

Life care plan prepared by [________________________________], dated [__/__/____] (enclosed).

C. Lost Income

Past Lost Income:

Future Lost Earning Capacity (Present Value):

Vocational analysis by [________________________________] dated [__/__/____] calculates future lost earning capacity at $[________________] (present value). [Summarize methodology.]

D. Non-Economic Damages

Under Utah law, non-economic damages (pain and suffering, emotional distress, loss of enjoyment of life, loss of consortium) are recoverable from a UM/UIM carrier. [Describe pain and suffering, emotional distress, activity limitations, and impact on family relationships.]

E. PIP Benefits Already Paid / to be Credited

PIP benefits paid to date: $[________________] (carrier: [________________________________]).

Per Utah Code § 31A-22-305.3, UIM benefits are offset by amounts actually recovered from the tortfeasor's liability policy. PIP benefits paid by this Policy may or may not be offset depending on policy language — please advise whether the Policy includes a PIP offset clause.

F. Damages Summary

VII. SETTLEMENT WITH TORTFEASOR'S CARRIER

A. Status of Underlying Liability Claim

We [have reached / are finalizing] a settlement with [________________________________] (tortfeasor's carrier) for the policy limits of $[________________________________].

B. Consent to Settle Request

Under Utah Code § 31A-22-305.3 and standard Utah policy language, your written consent to settle with the tortfeasor's carrier is required before our client may accept the liability policy proceeds without waiving UIM rights. Accordingly:

We hereby formally request written consent to settle with [________________________________] for $[________________________________].

Please provide written consent (or a written waiver of subrogation rights) within [____] calendar days of the date of this letter.

If you decline to consent and wish to protect subrogation rights, you must tender to our client the amount sought from the tortfeasor's carrier within the time period required by the Policy and Utah law.

VIII. FORMAL DEMAND FOR UM/UIM POLICY LIMITS

A. UIM Benefits Calculation

B. Policy Limits Demand

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

Our client's total damages of $[________________________________] vastly exceed the combined available coverage. The tortfeasor's limits of $[________________________________] are wholly inadequate. This is a clear policy limits case.

IX. BAD FAITH WARNING UNDER UTAH LAW

[________________________________] owes our client — its own insured — the contractual duty of good faith and fair dealing implied in all insurance contracts under Utah law. Beck v. Farmers Insurance Exchange, 701 P.2d 795 (Utah 1985).

A. Utah Bad Faith Standard

The Utah Supreme Court in Beck v. Farmers Insurance Exchange, 701 P.2d 795 (Utah 1985), held that an insurer's violation of the covenant of good faith and fair dealing in a first-party claim is a breach of contract giving rise to contract damages (including consequential damages) and potentially tort damages. The two-part test requires showing:

1. The insurer acted unreasonably in handling the claim (denying, delaying, or undervaluing without a reasonable basis); AND
2. The insurer acted with knowledge of, or reckless disregard for, the unreasonableness of its conduct.

In the third-party context (including UM/UIM), where the insurer exercises exclusive control over settlement decisions affecting the insured's interests, a fiduciary duty analysis may additionally apply. Ammerman v. Farmers Insurance Exchange, 19 Utah 2d 261 (1967).

B. Unfair Claim Settlement Practices — Utah Code § 31A-26-303

The following conduct violates § 31A-26-303 and, where it constitutes a general business practice, is subject to regulatory action by the Utah Insurance Department:

☐ Misrepresenting pertinent facts or policy provisions
☐ Failing to acknowledge communications promptly
☐ Failing to adopt reasonable investigation standards
☐ Refusing to pay claims without a reasonable investigation
☐ Failing to attempt good faith settlement when liability is clear
☐ Compelling litigation by offering substantially less than the amount ultimately recovered
☐ Failing to promptly provide a reasonable explanation for any denial or compromise offer

C. Punitive Damages Exposure — Utah Code § 78B-8-201

Under Utah Code § 78B-8-201, punitive damages may be awarded upon clear and convincing evidence that the insurer's conduct was:

• Willful and malicious, OR
• Intentionally fraudulent, OR
• Manifesting knowing and reckless indifference toward, and disregard of, the rights of others

If [________________________________] unreasonably denies or delays this claim, the Insured will pursue all available remedies including punitive damages.

D. Attorney's Fees — Utah Code § 78B-5-825

Attorney's fees are recoverable if the Court finds that any claim or defense asserted was without merit and not brought in good faith. Utah Code § 78B-5-825.

X. ARBITRATION NOTICE

The Policy [does / does not] contain an arbitration clause for UM/UIM disputes. Utah Code § 31A-22-321 permits arbitration in certain insurance disputes, subject to de novo district court review.

If [________________________________] rejects this demand, we hereby provide notice of intent to invoke binding arbitration (or file suit in [________________________________] County District Court) as required under the Policy and Utah law.

XI. RESPONSE DEADLINE AND CONSEQUENCES

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

Consequences of Non-Response or Rejection

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

1. Suit will be filed in the District Court of [________________________________] County, Utah, seeking all available damages
2. Bad faith claims will be asserted under Beck v. Farmers and Utah Code § 31A-26-303
3. Punitive damages will be sought under Utah Code § 78B-8-201
4. Attorney's fees will be sought under Utah Code § 78B-5-825
5. Regulatory complaint will be filed with the Utah Insurance Department, State Office Building, Room 3110, Salt Lake City, UT 84114 (phone: 801-538-3800; online: insurance.utah.gov)

XII. DOCUMENT PRESERVATION NOTICE

This letter constitutes formal notice to preserve all documents and electronically stored information (ESI) relating to this claim, including but not limited to: the complete claim file, all adjuster notes and diaries, reserve documentation, internal communications, claim-handling manuals and guidelines, surveillance materials, and quality assurance reports.

Destruction or alteration of any such materials after receipt of this notice may give rise to spoliation sanctions.

XIII. CONCLUSION

This demand presents a clear-liability, serious-injury UM/UIM claim. Our client has exhausted or will exhaust the tortfeasor's minimal coverage. The Policy was purchased specifically for this situation. [________________________________] has both the obligation and the opportunity to resolve this claim fairly by paying its own insured the limits owed under Utah law.

We remain available to discuss resolution and invite your prompt response.

Respectfully submitted,

[________________________________]

By: ___________________________________
[________________________________], Esq.
Utah State Bar No. [________________]
[________________________________]
[________________________________], UT [________]
Tel: [________________________________]
Email: [________________________________]

Counsel for [________________________________]

ENCLOSURES:

☐ Policy declarations page and UM/UIM endorsements
☐ Tortfeasor's insurance verification (or denial of coverage documentation)
☐ Police / State crash report, Report No. [________________________________]
☐ Complete medical records and bills
☐ Life care plan / future medical cost analysis
☐ Wage loss documentation and vocational report
☐ Photographs of vehicles and scene
☐ Witness statements
☐ Accident reconstruction report (if obtained)
☐ Permanent impairment rating report
☐ PIP payment log

CC:

• [________________________________] (Client)
• [________________________________] (Tortfeasor's carrier — consent-to-settle copy)

UTAH UM/UIM LAW — QUICK REFERENCE

SOURCES AND REFERENCES

• Utah Code § 31A-22-305 — Uninsured motorist coverage: https://le.utah.gov/xcode/Title31A/Chapter22/31A-22-S305.html
• Utah Code § 31A-22-305.3 — Underinsured motorist coverage: https://le.utah.gov/xcode/Title31A/Chapter22/31A-22-S305.3.html
• Utah Code § 31A-22-307 — Personal injury protection: https://le.utah.gov/xcode/title31a/chapter22/31a-22-s307.html
• Utah Code § 78B-5-818 — Comparative negligence: https://le.utah.gov/xcode/Title78B/Chapter5/78B-5-S818.html
• Utah Code § 78B-8-201 — Punitive damages: https://le.utah.gov/xcode/Title78B/Chapter8/78B-8-S201.html
• HB 113 (2024) — New minimums effective Jan. 1, 2025: https://gunterinjurylaw.com/understanding-the-new-utah-state-car-insurance-minimums-effective-01-01-2025/
• Beck v. Farmers Insurance Exchange, 701 P.2d 795 (Utah 1985): https://law.justia.com/cases/utah/supreme-court/1985/18926-0.html
• Utah Insurance Department: https://insurance.utah.gov
• Utah Code § 31A-26-303 — Unfair claim settlement practices: https://le.utah.gov/xcode/Title31A/Chapter26/31A-26-s303.html