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Insurance Bad Faith

UM/UIM Bad Faith Claims

You bought UM/UIM coverage to protect yourself from uninsured drivers. If your insurer disputes the claim, the issue is not simply whose number is lower. We review the statute, policy, fault, damages, investigation, and contemporaneous claim record to determine whether benefits are owed and whether the handling was actionable.

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Key Takeaways

  • UM/UIM = first-party claim: Your own insurer owes you good faith, even when paying you
  • Oklahoma has high uninsured rates: The Oklahoma Insurance Department says the state's uninsured-motorist share is among the nation's highest
  • Do not assume stacking: For policies issued, renewed, or reinstated after November 1, 2014, § 3636 permits stacking only when the carrier expressly provides it
  • Extra-contractual remedies require separate proof: A disputed UM/UIM claim does not automatically support tort or punitive damages

Understanding UM/UIM Coverage

The Oklahoma Insurance Department says Oklahoma's percentage of uninsured motorists is among the nation's highest. UM/UIM coverage protects you when the driver who hits you has no insurance or too little coverage.

When you file a UM/UIM claim, you're asking your own insurer to evaluate insured status, fault, causation, and damages. The insurer may investigate and contest reasonably disputed issues, but Oklahoma case law also recognizes an implied duty of good faith and fair dealing. The Oklahoma Supreme Court first recognized that tort in Christian v. American Home Assurance Co..

For the coverage process after a motorcycle crash, start with our motorcycle UM/UIM claims guide. This page addresses the separate question of whether the insurer handled that claim unreasonably.

Uninsured Motorist (UM)

Covers you when the at-fault driver has no insurance:

  • Driver with no policy at all
  • Hit-and-run where driver fled
  • Unidentified driver (phantom vehicle)
  • Insurance company denies their driver's coverage

Underinsured Motorist (UIM)

Covers you when the at-fault driver has insufficient insurance:

  • The at-fault vehicle has liability insurance
  • Its liability limits are less than the amount of the injury claim
  • The UM insurer may not delay solely until those limits are exhausted
  • Payment still depends on covered damages, credits, terms, and UM limits

Common UM/UIM Disputes

Each issue below may be legitimate or unreasonable depending on the policy, evidence, investigation, and explanation:

Disputing Liability

A dispute about who caused the collision, comparative fault, or whether the insured is legally entitled to recover.

Minimizing Injuries

A disagreement about diagnosis, causation, prognosis, treatment, impairment, or the value of claimed bodily injury.

Pre-Existing Condition Defense

A causation dispute involving prior symptoms, treatment, injury, or a claimed aggravation.

Lowball Settlements

A valuation that does not appear to address material medical, wage, liability, or other damages evidence supplied with the claim.

Stacking Position

A dispute over policy language, policy date, endorsements, premiums, and whether the carrier expressly provided stacking under current § 3636.

Claim Delay

A delay that should be compared with the information requested, work performed, communications, and any reasonable coverage or damages dispute.

Oklahoma UM/UIM Rules

Understanding Oklahoma's specific rules can strengthen your claim:

Mandatory Offer Requirement

Section 3636 gives an applicant the right to buy UM coverage up to the bodily-injury liability limits and uses an approved written form for rejection or selection of lower limits. A disputed or missing form requires policy- and transaction-specific review; coverage should not be assumed.

36 O.S. § 3636

Stacking Review

Multiple vehicles or policies can raise stacking questions. Current Oklahoma policies should be reviewed for express stacking language, endorsements, and premium history.

36 O.S. § 3636

Consent, Settlement Notice & Subrogation

Biles holds that lack of insurer consent to sue or obtain a judgment is not automatically a complete defense. A liability-limits settlement raises a different issue: § 3636(F) sets a certified-mail notice and 60-day substitute-payment process. Strong holds that imperfect compliance is not an automatic forfeiture; notice, prejudice, waiver, estoppel, and the insurer's opportunity to protect subrogation can matter. Review any release before signing.

36 O.S. § 3636(F); Biles; Strong

Hit-and-Run and Phantom Vehicles

Section 3636 includes hit-and-run vehicles. Biggs held a physical-contact restriction void when it narrowed the statutory coverage. The insured still must prove the unidentified motorist's fault, covered bodily injury and damages, and compliance with valid policy conditions.

36 O.S. § 3636; Biggs, 1977 OK 135

Other Types of Bad Faith Claims

First-Party Bad FaithPolicy Limits & Third-Party ClaimsStorm & Property ClaimsDelay & Denial TacticsHealth Insurance Bad FaithInsurance Bad Faith Overview

Frequently Asked Questions

Uninsured or underinsured motorist coverage is first-party bodily-injury coverage that may pay when an insured is legally entitled to recover from an uninsured, hit-and-run, or underinsured motorist. Payment depends on the statute, policy, insured status, fault, covered damages, credits, exclusions permitted by law, and limits. Oklahoma requires an approved written offer process and allows a named insured or applicant to reject coverage or select lower limits.
UM/UIM claims can involve disputes about insured status, fault, causation, damages, available liability coverage, prior payments, exclusions, limits, notice, or subrogation. The insurer may investigate and contest genuinely disputed issues. A denial, lower valuation, or adversarial tone is not bad faith by itself; the contemporaneous basis and handling of the claim must be reviewed.
A UM/UIM claim is a first-party claim, so the insurer owes its insured the common-law duty of good faith and fair dealing. That does not make every coverage, liability, or value dispute bad faith. The policy, Oklahoma UM statute, claim record, and the insurer's contemporaneous basis must be reviewed before deciding whether a tort claim exists.
Oklahoma's statute treats an insured vehicle as underinsured when its liability limits are less than the amount of the injured person's claim, regardless of how the liability and UM limits compare with each other. That definition does not establish the amount payable. The insured still must prove covered damages, and the available liability proceeds, prior payments, policy terms, and UM limits must be accounted for.
Not as a universal prerequisite. Oklahoma cases say a UM insurer may not withhold payment solely because the liability limits have not been exhausted when a reasonable investigation shows the claim exceeds the available liability coverage. Settlement still requires care: when a tentative agreement for the tortfeasor's liability limits is reached, current 36 O.S. § 3636(F) provides a certified-mail notice and substitute-payment process designed to protect subrogation rights.
An insurer may ask for records and investigate liability, causation, and damages. A difficult conversation or disagreement does not itself violate the duty of good faith. Document the requests, information supplied, explanations, deadlines, and decisions. Unreasonable handling may support a claim only when the required coverage, breach, causation, and damages are proved.
Stacking depends on the policy, policy date, endorsements, premium history, and whether the policy expressly provides for it. If you have multiple vehicles or policies, the complete policy file should be reviewed before accepting an insurer's non-stacking position.
Oklahoma's 36 O.S. § 3636 includes hit-and-run vehicles. In Biggs v. State Farm, the Oklahoma Supreme Court held that a policy could not add a physical-contact restriction inconsistent with the statute. The insured still must establish insured status, the unidentified motorist's fault, covered bodily injury and damages, and compliance with valid policy conditions. Prompt reporting and independent evidence remain important.
Available relief depends on the policy, legal theory, causation, and proof. It may include UM/UIM benefits or contract damages when owed and other loss proximately caused by actionable conduct. Emotional-distress damages, interest, attorney fees, and punitive damages each require a separate legal basis and proof; 23 O.S. § 9.1 governs punitive-damages categories.
In Wille v. GEICO, the Oklahoma Supreme Court held that an action to recover UM/UIM benefits follows the five-year written-contract period and accrues on breach, not on the accident date. That does not make delay safe. Policy notice and cooperation duties, a separate tort claim, claims against other parties, evidence preservation, and other deadlines can follow different rules. Give notice and obtain a deadline review promptly.

Get a Careful Review of Your UM/UIM Claim

We compare the policy and Oklahoma statute with the fault evidence, damages, payments, settlement history, and insurer's contemporaneous claim record.

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