UM/UIM Demand Letter - Utah

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Utah

[LAW FIRM LETTERHEAD]

SETTLEMENT COMMUNICATION — SUBJECT TO UTAH RULE OF EVIDENCE 408
AND, IF APPLICABLE, 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 an express writing on an insurer-provided form that reasonably explains UM coverage. The rejection continues with that insurer until the insured requests UM 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 or lower-limit selection for UM/UIM coverage. Accordingly, determine the applicable limits under §§ 31A-22-305(4) and 31A-22-305.3(3), including the insurer's maximum available limits and the Policy documents.

B. 2025 Liability and UM Minimum Limits (H.B. 113 (2023))

Effective January 1, 2025, pursuant to H.B. 113 (2023) and Utah Code § 31A-22-304(2), Utah's minimum motor-vehicle liability limits for policies issued or renewed on or after that date are:

Policies issued or renewed on or after January 1, 2025 must meet these liability minimums. UM coverage may not be sold below the minimum bodily-injury liability limits. UIM coverage is offered under § 31A-22-305.3, but a named insured may reject it or select lower limits; the statutory UIM floor is $10,000 per person / $20,000 per accident. The Insured's Policy [________________________________] was [issued / renewed] on [__/__/____].

C. Anti-Stacking Rules — Utah Code §§ 31A-22-305(7)–(8) and 31A-22-305.3(4)

Utah generally prohibits adding UM or UIM limits for multiple vehicles. The statutes contain limited exceptions for certain pedestrians and occupants of non-owned vehicles. Coverage on the occupied vehicle is primary, and a qualifying covered person may elect only the additional household coverage expressly permitted by §§ 31A-22-305(8) and 31A-22-305.3(4). Confirm the claimant's status and every potentially applicable policy before stating the available limit.

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 a bone fracture, OR
☐ The accident caused permanent disability or permanent impairment based on objective findings, OR
☐ The accident caused permanent disfigurement

Note: Section 31A-22-309(1)(b) expressly exempts an uninsured-motorist claim from the threshold. It does not state the same exemption for an underinsured-motorist claim. For a UIM claim seeking general damages, analyze the threshold and the policy before asserting entitlement.

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. Under § 78B-5-818(2), a claimant may recover from a defendant or group of defendants only when their combined allocated fault exceeds the claimant's fault. In the ordinary two-side case, this bars recovery at 50% claimant fault. Any recoverable award is reduced by the claimant's allocated fault.

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 a proper lookout (Utah common-law duty; insert controlling authority if disputed)
☐ 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 a traffic-control signal (Utah Code § 41-6a-305)
☐ Unsafe or unsignaled lane change (Utah Code § 41-6a-804)
☐ 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: [________________________________]).

Utah Code § 31A-22-305.3(3)(k) provides that UIM coverage may not be set off against the tortfeasor's liability coverage; the coverages are added or stacked to determine the coverage available. The claimant still may not recover more than the proven damages. Any asserted PIP credit should be supported by the Policy and current Utah law.

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

The Policy [does / does not] require written consent before settlement with the tortfeasor. Utah Code § 31A-22-305.3(6) provides that a UIM insurer has no reimbursement right against the liable person after the liability carrier tenders its limit and the claimant accepts it. To address any valid policy condition while avoiding delay, we provide notice and request written confirmation that the proposed settlement will not impair this UIM claim.

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 contend that consent or another policy condition applies, identify the exact provision and the legal basis for that position in your response.

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 held in Beck—itself a UM case—that first-party duties are contractual rather than fiduciary. The insurer must diligently investigate the facts, fairly evaluate the claim, and act promptly and reasonably in rejecting or settling it. A breach may support general and foreseeable consequential contract damages. Tort or punitive remedies require an independent tort; they do not arise merely from breach of the implied covenant.

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:

☐ Knowingly misrepresenting material facts or policy provisions at issue
☐ Failing to acknowledge communications promptly
☐ Failing to adopt reasonable standards for prompt investigation and processing
☐ Failing to attempt a prompt, fair, and equitable settlement when liability is reasonably 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

Section 31A-26-303(5) expressly states that the section does not create a private cause of action.

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

Punitive damages will be sought only if the evidence establishes an independent tort and satisfies § 78B-8-201's clear-and-convincing standard; breach of the first-party insurance covenant alone is contractual under Beck.

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

For actions governed by the current statute, § 78B-5-825 requires both that the civil action or defense be frivolous or lack a reasonable basis in law or fact and that it was brought to harass, cause unreasonable delay, needlessly increase litigation cost, or abuse the judicial process, subject to the statute's exceptions.

X. ARBITRATION NOTICE

The Policy [does / does not] contain an arbitration clause for UM/UIM disputes. Utah Code §§ 31A-22-305(9) and 31A-22-305.3(8) permit a covered person to elect binding arbitration or litigation of a first-party UM or UIM claim, subject to the detailed statutory procedures, exclusions, and trial-de-novo provisions. Section 31A-22-321 governs third-party bodily-injury arbitration and does not itself create or limit the first-party UM/UIM procedures.

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 [__/__/____].

If the covered person has elected arbitration or filed litigation and has supplied all disclosures required by § 31A-22-305.3(9)(a), the UIM carrier's statutory response period is a reasonable time not exceeding 60 days after receipt of the complete demand package. Do not state that an earlier demand deadline is statutory.

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. Breach of the implied covenant will be asserted under Beck v. Farmers; any § 31A-26-303 issue will be presented only for a legally proper purpose because the statute creates no private action
3. Punitive damages will be sought only if an independent tort and Utah Code § 78B-8-201 are established
4. Attorney's fees will be sought under Utah Code § 78B-5-825
5. Regulatory complaint will be filed with the Utah Insurance Department (Property & Casualty Consumer Service: 801-957-9305; 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 Title 31A, Chapter 22, Part 3 — current official PDF: https://le.utah.gov/xcode/Title31A/Chapter22/C31A-22-P3_1800010118000101.pdf
• 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
• Utah Code § 31A-22-304 — Minimum limits (HB 113 (2023), ch. 51; $30,000/$65,000/$25,000 for policies issued or renewed on/after Jan. 1, 2025 per subsec. (2)): https://le.utah.gov/xcode/Title31A/Chapter22/31A-22-S304.html
• Utah Code § 31A-22-321 — "321 arbitration" (third-party motor-vehicle claims only; § 321(2)(e) excludes UM/UIM): https://le.utah.gov/xcode/Title31A/Chapter22/31A-22-S321.html
• H.B. 113 (2023) — enrolled official bill: https://le.utah.gov/~2023/bills/hbillenr/HB0113.pdf
• 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 Insurance Department contact directory: https://insurance.utah.gov/about-us/contact-us/
• Utah Code § 31A-26-303 — Unfair claim settlement practices: https://le.utah.gov/xcode/Title31A/Chapter26/31A-26-s303.html