UM/UIM Demand Letter - Wisconsin

UM/UIM (UNINSURED/UNDERINSURED MOTORIST) DEMAND LETTER

State of Wisconsin

[LAW FIRM LETTERHEAD]

SETTLEMENT COMMUNICATION - FOR SETTLEMENT PURPOSES ONLY
EVIDENTIARY USE SUBJECT TO WIS. STAT. § 904.08 AND, WHERE APPLICABLE, 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]:

If and to the extent this letter constitutes compromise negotiations concerning a claim disputed as to validity or amount, Wis. Stat. § 904.08 and, where applicable, Federal Rule of Evidence 408 may limit specified uses of the negotiations. Those provisions do not themselves make an ordinary demand confidential or privileged and permit use for another purpose.

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. We request the full available UM/UIM limits and ask the Company to explain any lower valuation or coverage position. If the Company wrongfully withholds a contracted-for benefit without a reasonable basis, and knows or recklessly disregards that lack of a reasonable basis, our Client reserves a first-party bad-faith claim 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. For a covered policy without UIM coverage, Wis. Stat. § 632.32(4m)(a) requires a one-time written notice of UIM availability, with a brief description, in conjunction with delivery of the policy. If UIM coverage is accepted, § 632.32(4m)(d) requires limits of at least $50,000 per person and $100,000 per accident.

B. Wisconsin Stacking and Anti-Stacking Rules

Following 2011 Wisconsin Act 14, Wis. Stat. § 632.32(5)(f) permits policy language limiting the addition of similar coverage limits across motor vehicles. Enforceability depends on the precise policy language and applicable law. Counsel should independently verify:

☐ Whether the policy contains a valid anti-stacking clause under § 632.32(5)(f)
☐ 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)
☐ Unknown hit-and-run driver — physical contact occurred
☐ Unknown driver of a no-contact phantom vehicle — § 632.32(2)(g)2. conditions satisfied (competent corroboration from a nonclaimant, report to the specified officer or agency within 72 hours, and sworn statement to the insurer within 30 days)

A liability policy with limits below the financial responsibility minimum is not, by that fact alone, an uninsured motor vehicle under § 632.32(2)(g). Assess any underinsured claim under the policy and § 632.32(2)(d).

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(1). The claimant is measured separately against each person found causally negligent and is barred against a person when the claimant's negligence is greater than that person's negligence; allowed damages are reduced proportionally. The separate 51% threshold governs a negligent person's joint-and-several liability and should not be used as a universal claimant-fault bar in a multiparty case.

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 Statement/Citation: [If applicable — municipal or state citation, guilty plea, or the tortfeasor's statement, with its date, context, and witness identified. Assess admissibility in the proceeding in which it is offered.]

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)

The billed charges and any insurer payments are listed separately in the enclosed records. We ask the Company to identify the evidence and policy terms supporting its valuation of these medical services.

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. Our Client reserves all rights while reviewing the policy and any response before settling with the tortfeasor.

C. Made Whole Doctrine — Rimes / Petta

Our Client disputes [IDENTIFY SUBROGATION CLAIM] because [FACTS AND GOVERNING BASIS]. Before asserting reimbursement or subrogation, please identify the claimant, plan or policy, controlling contract or statute, amount claimed, and basis for priority. Apply Rimes v. State Farm Mutual Automobile Insurance Co., 106 Wis. 2d 263 (1982) and Petta v. ABC Insurance Co., 2005 WI 18, only where their made-whole rule governs the particular claim.

Our Client reserves the right to contest any asserted recovery under the applicable policy, plan, statute, and procedures.

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.

Depending on the evidence and the claims proved, recovery may include:

• Contract benefits owed under the policy, subject to its applicable limits, and separate damages proximately caused by proven bad faith
• Consequential damages (including emotional distress)
• Attorney's fees as compensatory damages (DeChant v. Monarch Life Ins. Co., 200 Wis. 2d 559 (1996))
• Punitive damages, if separately established against the Company, subject to the greater of $200,000 or twice compensatory damages under Wis. Stat. § 895.043(6)
• 7.5% 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 a covered amount within 30 days after receiving written notice of the covered loss and amount plus the policy-required proof of loss or equivalent evidence, and lacks reasonable proof of nonresponsibility, Wisconsin Statute § 628.46 imposes simple interest at 7.5% per annum on the overdue amount. Section 628.46(2) also pauses overdue status if no recipient can legally give a valid release or the insurer cannot determine the entitled payee, provided it promptly notifies the claimant and offers in good faith to pay once the payee is determined. Interest begins on [OVERDUE DATE: ____________] after the applicable requirements are met and any such pause ends.

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
   • 7.5% 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), P.O. Box 7873, Madison, WI 53707-7873 (mailing); 101 East Wilson Street, Madison, WI 53703 (street), (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

Please preserve documents and electronically stored information related to this claim, including the claim file, adjuster notes, communications, records reviews, recordings, and related ESI. Identify any retention limits that may affect those materials.

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. Stat. § 893.43(2) — 3-year statute of limitations on a motor vehicle insurance policy; UM/UIM cause of action accrues on final resolution of the underlying tortfeasor claim: https://docs.legis.wisconsin.gov/document/statutes/893.43
• 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)
• Wisconsin Office of the Commissioner of Insurance (OCI) — https://oci.wi.gov