UM/UIM Demand Letter - Wisconsin

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Wisconsin

[LAW FIRM LETTERHEAD]

PRIVILEGED AND CONFIDENTIAL
SETTLEMENT COMMUNICATION - FOR SETTLEMENT PURPOSES ONLY
PROTECTED UNDER WIS. STAT. § 904.08 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 — WISCONSIN LAW
Insured/Claimant: [________________________________]
Policy Number: [________________________________]
Claim Number: [________________________________]
Date of Loss: [__/__/____]
Loss Location: [________________________________], Wisconsin
UM/UIM Policy Limits: $[____________] per person / $[____________] per accident
Tortfeasor: [________________________________]
Tortfeasor's Liability Carrier: [________________________________]
Tortfeasor's Bodily Injury Limits: $[____________] per person / $[____________] per accident
Response Deadline: [__/__/____] at 5:00 p.m. Central Time

Dear [ADJUSTER_NAME]:

I. INTRODUCTION AND NATURE OF DEMAND

This firm represents [CLIENT_NAME] ("our Client") in connection with a claim for [☐ UNINSURED] [☐ UNDERINSURED] motorist benefits under your Wisconsin-issued automobile insurance policy arising from a motor vehicle collision that occurred on [__/__/____] in [COUNTY] County, Wisconsin. Our Client is a first-party insured under the above-referenced policy and is entitled to the full protection of Wisconsin's UM/UIM statutory framework under Wis. Stat. § 632.32.

This letter constitutes a formal demand for payment of the full UM/UIM policy limits of $[____________] and serves notice that [INSURANCE_COMPANY_NAME] ("the Company") must act in accordance with its fiduciary-like duty of good faith and fair dealing to its own insured, as articulated in Anderson v. Continental Insurance Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978), and its progeny.

Our Client's documented damages substantially exceed both the tortfeasor's bodily injury limits and the available UM/UIM coverage. This is a textbook policy-limits case under Wisconsin law, and anything less than a full limits tender will be treated as a refusal to honor the contract and evidence of first-party bad faith actionable under Brethorst v. Allstate Property & Casualty Insurance Co., 2011 WI 41, 334 Wis. 2d 23, 798 N.W.2d 467.

II. WISCONSIN UM/UIM STATUTORY FRAMEWORK

A. Mandatory Coverage Under Wis. Stat. § 632.32

Wisconsin requires every motor vehicle liability policy delivered or issued for delivery in Wisconsin to contain uninsured motorist coverage. Per Wis. Stat. § 632.32(4), the minimum UM limits are $25,000 per person and $50,000 per accident for bodily injury. These minimums were set by 2011 Wisconsin Act 14, effective November 1, 2011.

Underinsured motorist coverage is not statutorily mandated, but insurers must provide a written mandatory offer of UIM coverage at the time of initial application under Wis. Stat. § 632.32(4m). When UIM coverage is elected, the minimum limits are $50,000 per person and $100,000 per accident — double the required UM minimums.

B. Wisconsin Stacking and Anti-Stacking Rules

Following 2011 Wisconsin Act 14, insurers are permitted to include anti-stacking provisions under Wis. Stat. § 632.32(5)(f) and (6). However, the enforceability of any anti-stacking language depends on the precise policy language and whether it complies with the statute. Counsel should independently verify:

☐ Whether the policy contains a valid anti-stacking clause under § 632.32(6)
☐ Whether multiple vehicles are insured under the policy
☐ Whether separate premiums were paid for UM/UIM coverage on each vehicle
☐ Whether any "other insurance" or "drive-other-car" clauses apply

In this matter, coverage stacks as follows: [________________________________]

C. Reducing Clauses and the Kromrey Doctrine

Wisconsin permits reducing clauses under Wis. Stat. § 632.32(5)(i), but such clauses must be clear and unambiguous and cannot operate to reduce coverage below the minimum statutory limits. See Kromrey v. American Family Mutual Insurance Co., 2007 WI App 133, and Welin v. American Family Mutual Insurance Co., 2006 WI 81, holding that certain reducing clauses that effectively negate promised coverage are impermissible.

The Company's UIM coverage here [☐ CONTAINS] [☐ DOES NOT CONTAIN] a reducing clause. [If applicable: That clause is unenforceable because ____________.]

D. Coverage Trigger in This Matter

UM Trigger (Wis. Stat. § 632.32(2)(g)):

☐ Tortfeasor carried no liability insurance at the time of the collision
☐ Tortfeasor's liability carrier has denied coverage or become insolvent (triggering Wisconsin Insurance Security Fund considerations under Wis. Stat. ch. 646)
☐ Hit-and-run driver — physical contact required under policy terms unless otherwise stated
☐ Tortfeasor's limits fall below Wisconsin financial responsibility minimums

UIM Trigger (Wis. Stat. § 632.32(2)(d)):

☐ Tortfeasor's bodily injury limits of $[____________] are less than our Client's damages
☐ Our Client has exhausted or will exhaust the tortfeasor's liability limits
☐ Our Client's documented damages of $[____________] substantially exceed the tortfeasor's available coverage

III. THE COLLISION AND LIABILITY UNDER WISCONSIN LAW

A. Facts of the Collision

On [__/__/____] at approximately [__:__] [a.m./p.m.], our Client was [☐ operating a motor vehicle] [☐ a passenger] [☐ a pedestrian] at or near [LOCATION], in the [CITY/TOWN/VILLAGE] of [________________], [COUNTY] County, Wisconsin.

[DETAILED_DESCRIPTION_OF_COLLISION]

The collision was investigated by [☐ Wisconsin State Patrol] [☐ [CITY] Police Department] [☐ [COUNTY] County Sheriff's Department], and documented in Wisconsin Crash Report No. [________________] (DT4000 form), a certified copy of which is enclosed.

B. Tortfeasor's Negligence

The tortfeasor, [TORTFEASOR_NAME], was negligent under Wisconsin common law and violated one or more provisions of the Wisconsin Motor Vehicle Code (Wis. Stat. ch. 346) in the following respects:

☐ Operating while intoxicated in violation of Wis. Stat. § 346.63 (OWI) — [BAC of [____]%]
☐ Failure to yield right-of-way — Wis. Stat. § 346.18
☐ Following too closely — Wis. Stat. § 346.14(1)
☐ Exceeding speed limit — Wis. Stat. § 346.57
☐ Inattentive driving — Wis. Stat. § 346.89
☐ Operating without required insurance — Wis. Stat. § 344.62
☐ Failure to stop at stop sign or signal — Wis. Stat. §§ 346.46, 346.37
☐ Improper lane change — Wis. Stat. § 346.13
☐ Reckless driving — Wis. Stat. § 346.62
☐ Texting/distracted driving — Wis. Stat. § 346.89(3)

C. Wisconsin Modified Comparative Negligence Analysis

Wisconsin follows modified comparative negligence under Wis. Stat. § 895.045, which bars recovery only when the claimant's causal negligence is greater than that of the person against whom recovery is sought (the "51% bar"). Further, under § 895.045(1), a defendant is jointly and severally liable only if found 51% or more causally negligent.

Our Client bears no comparative fault in this collision. Even if any minimal contributory negligence could be argued, it would not approach the statutory bar.

D. Evidence Supporting Liability

1. Wisconsin Crash Report: [DT4000 Report No. ____________]

2. Witness Statements: [NUMBER] independent witnesses — statements and contact information enclosed

3. Physical and Scene Evidence: Point of impact, gouge marks, skid marks, debris field, and final rest positions

4. Photographs and Dashcam: [DESCRIPTION]

5. Expert Analysis: [If applicable — accident reconstructionist report]

6. Tortfeasor's Admission/Citation: [If applicable — municipal or state citation, guilty plea, or admission against interest under Wis. Stat. § 908.03]

IV. OUR CLIENT'S INJURIES AND TREATMENT

A. Injury Summary

As a direct and proximate result of the tortfeasor's negligence, our Client sustained the following injuries:

Primary Diagnoses:

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

Secondary/Related Conditions:

• [________________________________]
• [________________________________]

B. Treatment Timeline

C. Current Condition and Prognosis

[DESCRIBE_CURRENT_CONDITION_AND_PROGNOSIS]

Treating physicians have opined to a reasonable degree of medical probability that our Client's injuries are permanent and causally related to the collision.

D. Permanent Impairment Ratings (AMA Guides / Wisconsin Worker's Compensation Schedule where applicable)

V. DAMAGES

A. Past Medical Expenses (Itemized)

Note: Under Leitinger v. DBart, Inc., 2007 WI 84, our Client is entitled to recover the reasonable value of medical services, which generally means billed charges, not amounts actually paid by insurance under the collateral source rule.

B. Future Medical Expenses (Present Value)

C. Lost Earnings and Loss of Earning Capacity

D. Pain, Suffering, and Non-Economic Damages

Wisconsin does not cap non-economic damages in automobile injury cases (unlike medical malpractice under Wis. Stat. § 893.55). Our Client is entitled to full compensation for:

• Past physical pain and suffering
• Future physical pain and suffering
• Past mental anguish and emotional distress
• Future mental anguish
• Loss of enjoyment of life
• Disability and disfigurement
• Permanent impairment

Non-economic damages claimed: $[____________]

E. Consortium Damages (If Applicable)

Under Wis. Stat. § 895.415 and Wisconsin common law, our Client's spouse [SPOUSE_NAME] is entitled to loss of consortium damages of $[____________].

F. Damages Summary

VI. SETTLEMENT WITH TORTFEASOR'S LIABILITY CARRIER

A. Status of Underlying Liability Settlement

We [☐ HAVE REACHED] [☐ ARE IN ACTIVE NEGOTIATION FOR] a settlement with [TORTFEASOR_CARRIER] for the tortfeasor's bodily injury policy limits of $[____________].

B. Consent to Settle and Preservation of Subrogation Rights (Vogt v. Schroeder)

Under Wisconsin law, most UM/UIM policies require the insurer's written consent before the insured settles with and releases the tortfeasor, in order to preserve the UM/UIM carrier's subrogation rights. See Vogt v. Schroeder, 129 Wis. 2d 3, 383 N.W.2d 876 (1986).

We hereby formally request [CARRIER_SHORT_NAME]'s written consent to settle with [TORTFEASOR_CARRIER] for its policy limits of $[____________], or, in the alternative, [CARRIER_SHORT_NAME]'s exercise of its right to substitute payment of those limits and preserve its subrogation claim.

Please respond within thirty (30) days of this letter. Failure to respond will be deemed consent, and our Client will proceed with the liability settlement while preserving all UIM rights.

C. Made Whole Doctrine — Rimes / Petta

Wisconsin's "made whole" doctrine, as articulated in Rimes v. State Farm Mutual Automobile Insurance Co., 106 Wis. 2d 263, 316 N.W.2d 348 (1982), and extended in Petta v. ABC Insurance Co., 2005 WI 18, 278 Wis. 2d 251, 692 N.W.2d 639, precludes any subrogation recovery by [CARRIER_SHORT_NAME] or its affiliates (including any health or med-pay carriers) until our Client has been fully compensated for all damages arising from the collision. Our Client has not been, and cannot be, made whole from the tortfeasor's limits alone.

Any subrogation claim asserted by the Company's medical payments, PIP, or health carrier affiliates is subject to a Rimes hearing and will be disputed.

VII. DEMAND FOR UM/UIM BENEFITS

A. Calculation of UIM Benefits Due

B. Policy Limits Demand

[CLIENT_NAME] hereby demands tender of the full UM/UIM policy limits of $[____________].

Our Client's damages of $[____________] vastly exceed the combined liability and UM/UIM coverage available. Under any reasonable evaluation of this claim, the full policy limits are owed.

VIII. WISCONSIN BAD FAITH WARNING — ANDERSON / TRINITY / BRETHORST

[CARRIER_SHORT_NAME] owes its insured — our Client — the duty of good faith and fair dealing recognized in Anderson v. Continental Insurance Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978). Under Anderson, an insured establishes bad faith by showing:

1. The absence of a reasonable basis for denying benefits (objective element); AND
2. The insurer's knowledge or reckless disregard of the lack of a reasonable basis for denying the claim (subjective element).

The Wisconsin Supreme Court has further clarified in Trinity Evangelical Lutheran Church v. Tower Insurance Co., 2003 WI 46, 261 Wis. 2d 333, 661 N.W.2d 789, that the failure to conduct a reasonable investigation and subject its results to a reasonable evaluation constitutes bad faith. And in Brethorst v. Allstate Property & Casualty Insurance Co., 2011 WI 41, the Court confirmed that a first-party bad faith claim is available against a UM/UIM insurer upon a showing of some breach of the insurance contract.

Available remedies for first-party bad faith include:

• Full contract damages (policy benefits in excess of limits)
• Consequential damages (including emotional distress)
• Attorney's fees as compensatory damages (DeChant v. Monarch Life Ins. Co., 200 Wis. 2d 559 (1996))
• Punitive damages under Wis. Stat. § 895.043 (capped at $200,000 or twice compensatory damages, whichever is greater — except in OWI cases where the cap does not apply under § 895.043(6))
• 12% simple interest on overdue claims under Wis. Stat. § 628.46

Any refusal or lowball tender will result in immediate filing of a bad faith action in [COUNTY] County Circuit Court.

IX. STATUTORY INTEREST UNDER WIS. STAT. § 628.46

If the Company fails to pay the amount owed within 30 days of receipt of this demand and supporting proof of loss, Wisconsin Statute § 628.46 imposes simple interest at 12% per annum on the overdue amount. That interest has begun accruing as of [__/__/____], the date the Company received sufficient proof of loss.

X. ARBITRATION CONSIDERATIONS

A. Policy Arbitration Provision

The policy [☐ CONTAINS] [☐ DOES NOT CONTAIN] an arbitration clause for UM/UIM disputes. Wisconsin law generally enforces such clauses under Wis. Stat. ch. 788 (Wisconsin Arbitration Act).

[If applicable:] The arbitration clause reads as follows: [________________________________]

B. Arbitration Demand (Conditional)

If [CARRIER_SHORT_NAME] fails to accept this demand, consider this letter formal notice of intent to invoke arbitration under the policy and Wis. Stat. ch. 788. Our Client will appoint [________________] as arbitrator and demands the Company appoint its arbitrator within thirty (30) days.

XI. RESPONSE DEADLINE AND CONSEQUENCES

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

Consequences of Non-Response or Insufficient Response:

1. Immediate filing of suit in [COUNTY] County Circuit Court seeking:
   - All UM/UIM benefits
   - First-party bad faith damages under Anderson/Brethorst
   - 12% statutory interest under Wis. Stat. § 628.46
   - Punitive damages under Wis. Stat. § 895.043
   - Attorney's fees as compensatory damages under DeChant
   - Costs and disbursements under Wis. Stat. § 814.04

2. Administrative complaint filed with the Wisconsin Office of the Commissioner of Insurance (OCI), 125 South Webster Street, P.O. Box 7873, Madison, WI 53707-7873, (800) 236-8517, alleging violation of Wis. Admin. Code Ins § 6.11 (unfair claims settlement practices) and Wis. Stat. § 628.34

3. Discovery and disclosure demands served under Wis. Stat. § 804.01 seeking the complete claim file, reserve history, claim manuals, training materials, and bad faith investigation documents

4. Preservation notice — see Section XIII below

XII. RELEASE TERMS

Upon receipt of the full policy limits tender, our Client will execute a limited release of UM/UIM claims only, preserving:

• All bad faith claims
• All claims against the tortfeasor
• All claims against any other insurers
• Any subrogation rights belonging to our Client

XIII. DOCUMENT PRESERVATION NOTICE

This letter constitutes formal notice to preserve all documents and electronically stored information related to this claim, including but not limited to: the complete claim file; all adjuster notes, activity logs, and diary entries; reserve information; all internal and external communications; claim manuals, training materials, and best practices guides; surveillance; recorded statements; medical records reviews; and all related ESI. Spoliation will result in sanctions under Wisconsin law including adverse inference instructions under Garfoot v. Fireman's Fund Insurance Co., 228 Wis. 2d 622 (Ct. App. 1999).

XIV. CONCLUSION

This claim presents clear tortfeasor liability, catastrophic injuries, and documented damages that vastly exceed all available coverage. [CARRIER_SHORT_NAME] has an opportunity — and a legal obligation — to honor the UM/UIM contract it sold to our Client by tendering its policy limits. Any other response will result in immediate litigation and a bad faith action that will ultimately cost the Company far more than the policy limits.

We look forward to [CARRIER_SHORT_NAME]'s timely and good-faith response.

Respectfully submitted,

[LAW_FIRM_NAME]

By: _______________________________
[ATTORNEY_NAME]
Wisconsin State Bar No. [________]
[ADDRESS]
[CITY], WI [ZIP]
Telephone: [____________]
Email: [________________]

Counsel for [CLIENT_NAME]

ENCLOSURES:

• Wisconsin DT4000 Crash Report
• Policy declarations and UM/UIM endorsement
• Certified medical records and itemized bills
• Wage loss documentation
• Photographs of scene, vehicles, and injuries
• Witness statements
• Expert reports (if applicable)
• CV of treating physicians
• [Other]

CC:

• [CLIENT_NAME]
• [TORTFEASOR_CARRIER] (re: consent to settle and preservation of subrogation)
• [Health insurance carrier] (re: Rimes made-whole doctrine)

WISCONSIN UM/UIM LAW QUICK REFERENCE

SOURCES AND REFERENCES

• Wis. Stat. § 632.32 — Provisions of motor vehicle insurance policies: https://docs.legis.wisconsin.gov/document/statutes/632.32
• Wis. Stat. § 628.46 — Timely payment of claims: https://docs.legis.wisconsin.gov/statutes/statutes/628/iii/46
• Wis. Stat. § 895.043 — Punitive damages: https://docs.legis.wisconsin.gov/statutes/statutes/895/i/043
• Wis. Stat. § 895.045 — Contributory negligence: https://docs.legis.wisconsin.gov/statutes/statutes/895/i/045
• Wis. Admin. Code Ins § 6.11 — Insurance claim settlement practices: https://docs.legis.wisconsin.gov/code/admin_code/ins/6/11
• Anderson v. Continental Ins. Co., 85 Wis. 2d 675, 271 N.W.2d 368 (1978)
• Trinity Evangelical Lutheran Church v. Tower Ins. Co., 2003 WI 46, 261 Wis. 2d 333, 661 N.W.2d 789
• Brethorst v. Allstate Prop. & Cas. Ins. Co., 2011 WI 41, 334 Wis. 2d 23, 798 N.W.2d 467
• Kromrey v. Am. Fam. Mut. Ins. Co., 2007 WI App 133
• Rimes v. State Farm Mut. Auto. Ins. Co., 106 Wis. 2d 263, 316 N.W.2d 348 (1982)
• Petta v. ABC Ins. Co., 2005 WI 18, 278 Wis. 2d 251, 692 N.W.2d 639
• DeChant v. Monarch Life Ins. Co., 200 Wis. 2d 559, 547 N.W.2d 592 (1996)
• Leitinger v. DBart, Inc., 2007 WI 84
• Wisconsin Office of the Commissioner of Insurance (OCI) — https://oci.wi.gov