ARBITRATION IN UNINSURED AND UNDERINSURED MOTORIST DISPUTES IN UTAH (PART II: INSURANCE CARRIER’S OBLIGATION REGARDING ARBITRATION AND PLAINTIFF’S OPTIONS)
Last week, I began a discussion of the provisions of U.C.A. §§ 31A-22-305(9) and 31A-22-305.3, dealing with arbitration in cases involving uninsured (UM) and underinsured (UIM) motorist claims. This week, I will focus on two more provisions of these statutes, specifically the insurance carrier’s obligations once the plaintiff files his or her initial disclosures, and the plaintiff’s options regarding the insurance carrier’s response.
Insurance Carrier’s Obligations Regarding Arbitration (U.C.A. §§ 31A-22-305(9)(c) and 31A-22-305.3(8)(c))
After the plaintiff provides his or her initial disclosures, the UM Or UIM insurance carrier has a “reasonable time,” not to exceed sixty days, to respond. The carrier must provide the following to the plaintiff:
- A written response to the written demand for payment.
- The amount, if any, of the UM or UIM carrier’s determination of the amount owed to the covered person, less the amount of any state or federal statutory liens.
- If the exact amount of the state or federal statutory lien is established, this amount shall be deducted from the UM or UIM carrier’s determination of the amount owed to the covered person.
- If the amount of the state or federal statutory lien is not established, the UM or UIM carrier shall deduct two times the amount of the medical expenses subject to the state or federal statutory lien until such time as the exact amount of the state or federal statutory lien is established.
These provisions put the burden on the UM or UIM insurance carrier to adequately assess the claim at an early stage. The timely and accurate exchange of information between the parties is crucial at this point in the process.
If the UM or UIM insurance carrier tenders the total amount of the policy limits, the tendered amount shall be accepted by the plaintiff. This does not preclude the plaintiff from accepting the amount tendered as partial payment of the claim, and continuing to arbitrate or litigate the remaining claim (see below).
Options for Covered Person After Receiving Insurance Carrier’s Response (U.C.A. §§ 31A-22-305(9)(d) – (f) and 31A-22-305.3(8)(d) – (f))
After receiving the UM or UIM insurance carrier’s response, the plaintiff has two options: (1) he or she may elect to accept the amount tendered by the insurance carrier as payment in full for all UM or UIM claims; or (2) accept the amount tendered as partial payment of the UM or UIM claims, and litigate or arbitrate the remaining claims.
Should the plaintiff accept the amount tendered as partial payment of all claims, the final award received through later arbitration, litigation or settlement shall be reduced by any amount tendered by the UM or UIM insurance carrier. Further, in any arbitration proceeding on the remaining claims, the parties may not disclose to the arbitrator or the arbitration panel either the amount initially tendered by the insurance carrier or the applicable insurance policy limits.
Neophyte Lawyer’s Thoughts
As I said last week, I’ll reserve the full analysis of these provisions for next week. But last week’s initial disclosure requirements and this week’s response requirements do reveal a pattern. Since the discovery period is relatively short in these arbitration cases, it is imperative for the plaintiff to have all the information necessary o support the claim prior to filing the complaint. Likewise, the defendant needs to complete an accurate and honest appraisal of the merits of the case in a timely manner.
This requires both parties to share all the pertinent information from the outset. Withholding anything at this point will be extremely counterproductive to the arbitration process.