OPINION

STOWERS, Justice.

I. INTRODUCTION

Following a car accident with an uninsured motorist, Lori McDonnell filed suit against her insurer State Farm Mutual Automobile Insurance Company on behalf of herself and her minor son, Luke. McDonnell sought a declaratory judgment that: (1) she was entitled to have her personal injury claims settled by appraisal under the mandatory appraisal statute, AS 21.96.035; and (2) a provision in her State Farm insurance policies requiring her to file suit against the insurance company within two years of the accident was void as against public policy. The superior court ruled that the mandatory appraisal statute did not apply to personal injury claims. The court further ruled that the contractual two-year limitations provision was enforceable, but only if State Farm could show that it was prejudiced by an insured's delay in bringing suit, and that the appropriate accrual date for the limitations period was the date State Farm denied an insured's claim, rather than the date of the accident.

McDonnell and State Farm both appeal. McDonnell argues the mandatory appraisal statute applies to her personal injury claims and the two-year limitation provision is wholly void as against public policy. State Farm argues the two-year limitation provision is wholly enforceable. For the reasons explained below, we affirm the superior court's rulings.

II. FACTS AND PROCEEDINGS

On August 7, 2007, McDonnell and her son were involved in a car accident. The driver of the other vehicle fled the scene and was never identified.

McDonnell had two State Farm insurance policies that both provided uninsured motorist (UM) and underinsured motorist (UIM) coverage. McDonnell claimed that the accident had caused her and her son Luke to suffer back injuries. State Farm agreed that McDonnell and her son were entitled to UM coverage but disputed that the accident had caused all of their asserted injuries. The parties were unable to settle McDonnell's claims.

McDonnell's insurance policies required her to bring suit against State Farm within two years of the accident if the parties could not agree on the amount of her damages. On August 7, 2009, McDonnell filed a complaint against State Farm on behalf of herself and Luke.1 She sought a declaratory judgment that the two-year limitation provision was unenforceable and that she was entitled to resolve her claims by appraisal under AS 21.96.035.2 State Farm argued the two-year limitations period was a fully enforceable contract provision and the mandatory appraisal statute did not apply to McDonnell's personal injury claims. McDonnell and State Farm filed cross-motions for summary judgment on the mandatory appraisal issue. McDonnell also filed a motion for judgment on the pleadings on the enforceability of the two-year limitation provision.

Superior Court Judge Sen K. Tan granted State Farm's summary judgment motion, ruling that under the plain language of AS 21.96.035 the mandatory appraisal procedure did not apply to McDonnell's personal injury claims. The superior court also granted in part McDonnell's motion for judgment on the pleadings, ruling that even though the issue was technically moot it should nevertheless be reviewed under the public interest exception to the mootness doctrine. Relying on Estes v. Alaska Insurance Guaranty Association,3 the court then ruled that the contractual two-year limitations period was enforceable, but only if State Farm could show it had suffered prejudice from an insured's delay in filing suit. The court also ruled that the appropriate accrual date for the limitations period was the date when State Farm denied an insured's claim, not the date of the accident.

Both parties appeal, reiterating their arguments whether AS 21.96.035 applies to McDonnell's UM personal injury claims, whether McDonnell's challenge to the two-year limitations provision was moot, and whether that provision is void as against public policy.

III. STANDARD OF REVIEW

We review a judgment on the pleadings under Alaska Civil Rule 12(c) and a summary judgment under Alaska Civil Rule 56 de novo.4 Both judgments are appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.5 A judgment on the pleadings must be based solely on the pleadings, however, while a summary judgment may be supported by evidence outside the pleadings, such as affidavits and depositions.6

Whether State Farm is entitled to summary judgment on the mandatory appraisal issue turns on the interpretation of AS 21.96.035. We apply our independent judgment to questions of statutory interpretation, adopting the rule of law that is "most persuasive in light of precedent, reason, and policy."7 Whether McDonnell is entitled to a judgment on the pleadings on the two-year limitation issue turns on the enforceability of that contract provision, a question of law that we review de novo.8

IV. DISCUSSION

A. Mandatory Appraisal Under AS 21.96.035 Does Not Apply To McDonnell's Personal Injury Claims.

Alaska regulates insurance through a comprehensive insurance code.9 Alaska Statute 21.96.035 provides that certain types of insurance policies must include an appraisal clause for resolving disputes over the value of a covered loss:

The statute also describes in detail the appraisal process that the insurer and insured must follow:

McDonnell describes AS 21.96.035 as mandating an "appraisal-arbitration process" and argues that she has a right to resolve her UM dispute with State Farm by way of this process. She argues that under the plain language of the statute, the appraisal process applies to personal injury claims because the statute applies to disputes over the value of "a covered first party's loss for real properly, personal property, business property, or similar risks."12 Although the insurance code does not define "personal property,"13 the general statutory definition under AS 01.10.060 provides, "In the laws of the state, unless the context otherwise requires, ... 'personal property' includes money, goods, chattels, things in action, and evidences of debt."14 A "thing in action," also called a "chose in action," includes claims for damages, such as a personal injury claim.15 We have recognized that "a chose in action, such as [a plaintiffs] claim for personal injuries, is a form of property."16 McDonnell argues that we must presume the legislature knew the term "personal property" included personal injury claims,17 therefore this term should be given its plain meaning under the general statutory definition of "personal property."

State Farm counters that the general definition of "personal property" under AS 01.10.060 is not conclusive because the statute requires consideration of the context in which the term is used,18 and McDonnell's interpretation is inconsistent with the ordinary meaning of the term "appraisal."

The superior court rejected McDonnell's interpretation of AS 21.96.035, ruling that the context and structure of the statute show the mandatory appraisal procedure is limited to disputes over the value of tangible property. The court reasoned that: (1) the statute's expedited timeline suggests the legislature did not intend for the process to apply to complex medical disputes; (2) the legislature specifically used the term "appraisal," which is not synonymous with "arbitration"; and (3) McDonnell's interpretation would require the "appraisal" of essentially all claims, thereby rendering superfluous the statute's limitation to certain types of property loss. The court also noted a "conceptual issue" with McDonnell's argument that a chose in action is personal property subject to mandatory appraisal, reasoning "the right to sue is the property right, not the injury on which the right to sue is based"; therefore McDonnell and her son "should not be able to arbitrate their right to sue when what they want is to arbitrate the value of the injury itself."19

We interpret statutes "according to reason, practicality, and common sense, considering the meaning of the statute's language, its legislative history, and its purpose."20 We have rejected a mechanical application of the plain meaning rule in favor of a sliding scale approach to statutory interpretation.21 Thus, "[t]he plainer the statutory language is, the more convincing the evidence of contrary legislative purpose or intent must be."22

1. Plain language of the statute

We conclude that the superior court's interpretation of AS 21.96.035 is more consistent with the plain language of the statute than McDonnell's interpretation. McDonnell is correct that under a very narrow and literal interpretation of the statute, AS 21.96.035 applies to disputes over the value of "personal property," which is generally defined under AS 01.10.060(a)(9) as including "things in action," such as a personal injury claim. But, as State Farm argues, the general statutory definition of "personal property" does not apply if "the context [of the statute] otherwise requires."23 McDonnell's plain language argument is unpersuasive when the text, context, and structure of the statute are considered as a whole.

First, AS 21.96.035 states that it applies to disputes over the value of a "loss for real property, personal property, and business property, or other similar risks." Interpreting a "loss for ... personal property" as a "loss for ... a personal injury claim" as McDonnell advocates does not make sense, grammatically or conceptually. As the superior court observed, McDonnell is not seeking an appraisal of a loss to her claim, but an appraisal of the underlying injury itself.

Second, if the legislature intended for "personal property" to include all "choses in action," then essentially all insurance claims would be subject to mandatory appraisal. This would render the statute's language limiting the appraisal process to "real property,... business property, and other similar risks" superfluous.24 When engaging in statutory interpretation, "[w]e must presume 'that the legislature intended every word, sentence, or provision of a statute to have some purpose, force, and effect, and that no words or provisions are superfluous,'" and "we must, whenever possible, interpret each part or section of a statute with every other part or section, so as to create a harmonious whole."25 Application of these principles convinces us that the legislature did not intend the phrase "personal property" to include all choses in action.

Third, AS 21.96.035 mandates an "appraisal" clause, which is not synonymous with "arbitration," despite McDonnell's characterizations to the contrary.26 As the Alabama Supreme Court has observed, "An agreement for arbitration ordinarily encompasses the disposition of the entire controversy between the parties ..., whereas an agreement for appraisal extends merely to the resolution of the specific issues of actual cash value and the amount of loss."27 Questions of coverage, causation, or liability are not resolved by appraisal.28 The Fifth Circuit has also explained the differences between appraisal and arbitration:

Alaska's statutory scheme recognizes the distinction between appraisal and arbitration. The mandatory appraisal process for insurance disputes is codified under AS 21.96.035, while arbitration procedures are separately codified under Alaska's Uniform Arbitration Act.30 As the superior court here and courts in other jurisdictions have observed, there are key distinctions between the appraisal process and the arbitration process: Appraisal follows an expedited timeline and is resolved by a panel of independent appraisers, while arbitration is a quasi-judicial proceeding that is governed by a much more detailed statutory scheme and includes formal evidentiary hearings with depositions and witness testimony.31 Given these distinctions, interpreting the term "personal property" to include personal injury claims appropriate for appraisal under AS 21.96.035 would be problematic because the valuation of a personal injury claim would not be limited to valuation of the underlying injury. The valuation would necessarily take into account issues such as coverage, liability, causation, and attorney's fees — in short, issues properly resolved by arbitration rather than appraisal.

For all of these reasons, we hold that the plain language of AS 21.96.035 does not support interpreting "personal property" to include personal injury claims for the purposes of that statute.

2. Legislative history

Both parties argue that legislative history supports their respective interpretations of the mandatory appraisal statute. The superior court did not discuss or expressly rely on legislative history in interpreting AS 21.96.035. The legislative history that the parties cite sheds little additional light on the meaning of AS 21.96.035 — it shows that the legislature consistently described the appraisal clause as a mechanism for resolving disputes over the value of a first-party property loss,32 but never defined the term "property," which is precisely the issue we are faced with here. At best, the legislative history that the parties rely on shows that the legislature never expressly contemplated applying the appraisal provision to personal injury claims, and it does not contradict our plain-language interpretation of the statute.

3. Rules of policy considerations and interpretation

McDonnell also cites several policy considerations and general rules of interpretation in support of her argument that the plain language of AS 21.96.035 mandates the appraisal of her personal injury claims. She first cites the general rule of contract interpretation that arbitration clauses should be given the "broadest possible interpretation,"33 though she acknowledges that this rule specifically refers to a contractual arbitration clause, not a statutorily mandated appraisal clause. She also cites our strong public policy favoring arbitration,34 the rule that remedial statutes should be broadly interpreted,35 and the rule that statutes regulating the relationship between an insurer and insured should be interpreted strictly against the insurance company and liberally in favor of the insured.36 Finally, she argues that her interpretation is consistent with the industry practice of arbitrating UM and UIM coverage disputes.

As State Farm argues, most of these policy considerations and rules of interpretation apply to arbitration clauses, not appraisal clauses, and are only relevant if we first determine that AS 21.96.035 could reasonably be interpreted to require appraisal of a loss to a personal injury claim. Because the text and context of the statute show the legislature did not intend for the mandatory appraisal process to apply to a chose in action — such as a personal injury claim — general rules of interpretation, policy considerations, and industry practice cannot stretch the statute beyond its plain meaning to create such a requirement.37 Accordingly, we affirm the superior court's ruling that the plain language of AS 21.96.035 demonstrates that the legislature intended for the mandatory appraisal statute to apply to disputes over the value of a loss to tangible property and not to the value of "choses in action" such as McDonnell's personal injury claims.

B. State Farm's Contractual Two-Year Limitation Provision Is Enforceable Upon A Showing Of Prejudice, And Is Triggered By A Breach Of The Insurance Contract.

The parties next dispute the enforceability of the two-year limitation provision in State Farm's insurance policies. Because McDonnell filed a motion for judgment on the pleadings on this issue, the superior court's ruling was based solely on the facts alleged in the pleadings.38

In her complaint, McDonnell alleged that "[t]he only reason for this litigation is the purported inclusion in the policies described below of State Farm Endorsement 6127BN," which "by its terms, demands that suit be filed against State Farm and the uninsured driver on or before the second anniversary of the crash...." McDonnell requested a declaratory judgment that this provision was "void and unenforceable as a violation of Alaska's motor vehicle insurance scheme." In its answer, State Farm quoted the disputed provision in part and asserted that the provision was enforceable. The disputed provision provides:

1. Mootness

State Farm first argues, as it did before the superior court, that McDonnell's challenge to the enforceability of the two-year limitation provision as applied to UM claims is moot because she filed a lawsuit within two years of her accident, as the provision requires. The superior court agreed that McDonnell's claim was technically moot for this reason, but concluded review was appropriate under the public interest exception to the mootness doctrine. We disagree that the claim is moot.

A justiciable controversy is one that is not hypothetical, abstract, academic, or moot.40 "A claim is moot if it is no longer a present, live controversy, and the party bringing the action would not be entitled to relief, even if it prevails."41 McDonnell's claim presents a live controversy and, if she prevails, she would be entitled to the relief she seeks. As McDonnell argues, she filed this declaratory judgment action for the very purpose of challenging the two-year limitation provision, not for the purpose of complying with the provision and litigating the value of her UM claims. An insured should not be forced to purposefully violate a contractual limitation provision and risk losing her insurance benefits in order to bring a justiciable action challenging the enforceability of the provision. Furthermore, if McDonnell prevails on this issue, she will be entitled to the relief she seeks — a declaratory judgment that the two-year limitation provision is unenforceable. She would then have additional time to assess her injuries and continue settlement negotiations with State Farm before she is required to file suit under the generally applicable statute of limitations.42 Because McDonnell's claim is not moot, we need not consider whether it falls within the public interest exception to the mootness doctrine.43

2. Ripeness

State Farm also argues that McDonnell cannot challenge the enforceability of the two-year limitation provision as applied to UIM claims because her claims are only for UM coverage. The superior court characterized this as a ripeness issue and ruled that it could consider arguments related to both UM and UIM coverage, reasoning that the statutes and case law generally do not distinguish between the two. On appeal, State Farm argues that we should decline to consider any arguments pertaining to UIM claims. McDonnell argues that distinguishing between the two would unduly fragmentize our analysis of the enforceability of the two-year limitation provision.

The precise issue before us is whether State Farm's contractual limitation provision is enforceable against McDonnell's UM claims. Therefore, arguments that pertain only to UIM coverage would be hypothetical on the facts of this case. At least one other court has distinguished between UM and UIM claims when addressing statute of limitations issues, reasoning that there are important differences between the two types of coverage that may warrant different treatment for limitations purposes.44 We agree with State Farm that there may be practical distinctions between UM and UIM claims for purposes of accrual of statutory or contractual periods of limitations, and we therefore analyze the enforceability of State Farm's contractual limitation provision without reference to arguments that pertain solely to UIM claims.

3. Overview of the parties' arguments

Turning to the merits of the parties' arguments, State Farm argues that we should hold the two-year tort statute of limitations45 generally applies to UM claims and that the cause of action accrues on the date of the accident; it argues that if we so hold, the two-year limitation provision in State Farm's policies simply mirrors the generally applicable limitations period and accrual date. State

Farm also argues that the two-year limitation provision is a fully enforceable contract provision because it is reasonable and unambiguous. McDonnell argues that the three-year contract statute of limitations46 generally applies to UM claims and the cause of action does not accrue until the insurer breaches the insurance contract; she argues that State Farm's contractual limitation provision attempts to alter the statutory limitations period and accrual date that would generally apply to UM claims. She further argues that State Farm's attempt to contractually modify the generally applicable limitations period and accrual date for UM claims is wholly void as against public policy.

As previously discussed, the superior court ruled that: (1) the three-year statute of limitations for contract claims generally applies to insurance disputes; (2) this limitations period generally begins to run on the date the insurer denies an insured's claim; (3) under Estes v. Alaska Insurance Guaranty Association,47 State Farm may enforce a shorter contractual limitations period only if it first demonstrates it has suffered prejudice as a result of the insured's delay in filing suit; and (4) the contractual limitations period does not commence until State Farm denies an insured's claim.

We first address what limitations period and accrual date would generally apply to McDonnell's UM claims if State Farm's insurance policies did not require her to file suit within two years of the date of the accident. We next consider whether State Farm's contractual provision is enforceable.

4. Generally applicable limitations period and accrual date

a. Limitations period

We have previously held that the statute of limitations for contracts generally applies to insurance disputes.48 Under AS 09.10.053, the statute of limitations for contract claims is three years.49 We have not specifically addressed the applicable statute of limitations for UM claims.

Other jurisdictions almost uniformly hold that the contract statute of limitations applies to UM claims.50 These courts generally reason that because an insurer's duty to compensate an insured arises out of its insurance contract, not the mere occurrence of the underlying accident, the contract statute of limitations applies. For example, the Mississippi Supreme Court held: "A cause of action against an insurer for uninsured motorist benefits is an action on a contract. As such, a three year statute of limitations period applies."51 The Ohio Supreme Court held: "An insurance policy is a contract, and the relationship and rights of the insurer and insured are contractual in nature; therefore, a claim for UM/UIM coverage sounds in contract, not in tort."52 And the Arizona Court of Appeals recently explained: "An action sounds in contract when the duty breached is created by the contractual relationship and would not exist but for the contract.... But for the insurance contract, State Farm would have no duty to compensate [the insured] for damages caused by the uninsured driver."53

State Farm cites cases from North Carolina and Georgia holding that the tort statute of limitations applies to UM claims.54 One commentator has observed that the insurance industry argued forcefully for this position for years, but North Carolina and Georgia are among the few courts that have adopted this reasoning.55 Because applying the contract statute of limitations is consistent with our case law and the majority of other jurisdictions, we hold the three-year contract statute of limitations generally applies to UM claims.

b. Accrual date

Similarly, we have not yet specifically addressed when a UM claim accrues. But we have held that an insured's cause of action against her insurer generally accrues, and the statute of limitations begins to run, "at the time of the breach of the agreement," therefore "[a] cause of action for denial of coverage under an insurance policy accrues when coverage is disclaimed and the insured is notified."56

Other jurisdictions are divided regarding the proper accrual date for UM claims.57 Overall, however, the "most commonly held rule in UM/UIM cases is that the cause of action, because it is contractual in nature, accrues on the date the contract is breached," which is generally the "denial of a claim for benefits."58 For example, the Delaware Supreme Court held that the appropriate accrual date for a UM claim is determined by the contractual nature of the claim: "We think the answer to the remaining question — when a cause of action for uninsured motorist benefits accrues and the three-year limitation... begins to run — logically follows from the contract nature of the action."59 The court reasoned:

State Farm argues that it would be illogical to use breach of contract as the accrual date for UM claims in a case like this because a factfinder must first determine the amount of damages that McDonnell and her son are legally entitled to collect, and there will be no breach of the insurance contract unless and until State Farm then refuses to pay the damages owed. State Farm takes a narrow view of when an insurance contract is breached. Under similar circumstances, the Supreme Judicial Court of Maine concluded that it was not necessary for an insurer to deny all liability in order to breach an insurance contract; rather, the insurer's clear refusal to pay for certain medical bills after the insured had requested payment was sufficient to constitute an alleged beach of the contract and trigger the applicable limitations period.61 The Iowa Supreme Court also observed that "[u]nder general contract principles, the insured's claim typically accrues and the statute of limitations begins to run upon the insurer's denial of coverage or refusal to pay."62

We agree with this reasoning. As we have previously held, a breach of the insurance contract occurs "when coverage is disclaimed and the insured is notified."63 We take this opportunity to clarify that it is not necessary for an insurer to disclaim all coverage or liability in order to trigger the statute of limitations — a clear refusal to pay under the contract may be sufficient to constitute an alleged breach of the contract. If the parties disagree over when the contract was allegedly breached and the statute of limitations began to run, the superior court will resolve this factual issue.

State Farm also argues that if a UM claim accrues when the contract is allegedly breached, then the insured could delay triggering the statute of limitations by waiting "years, if not decades" to present a UM claim to her insurance company. This argument is unpersuasive. An insurance company can require the insured to make a claim or notice of potential claim within a certain period of time without requiring the insured to file suit against the insurer.64 And, as we have previously observed, once insurance companies have received notice of a claim, they "are not forced to stand by helplessly as memories fade and physical evidence is lost," but are "entitled to bring declaratory judgment actions to determine coverage at their own convenience."65

Because an alleged breach of contract accrual date is more consistent with Alaska case law, the contractual nature of UM claims, and a majority of other jurisdictions, we hold that UM claims accrue when the contract is allegedly breached, which occurs when the insurer denies a claim or clearly refuses a demand for payment under the insurance contract.

In sum, we hold that the three-year statute of limitations for contract claims generally applies to UM claims, and that the limitations period is triggered by an alleged breach of the insurance contract. Because State Farm's contractual limitations provision attempts to modify (shorten) the limitations period and accrual date that would generally apply to McDonnell's UM claims, we must consider whether the provision is enforceable or void as against public policy.

5. Contractual modification of the limitations period

A contractual provision may be unenforceable if the provision is unreasonable, unconscionable, or void as against public policy.66 Courts have generally held that parties may contractually agree to a shorter limitations period if the contractual limitations provision is unambiguous, reasonable, and does not violate statutes or public policy: "The general rule of contracts is that a contractual provision fixing limitation periods which differ from the time fixed by general statutes of limitations are binding on the contracting parties ... unless they are precluded by statute or public policy, or are unreasonable or unreasonably short."67

In Fireman's Fund Insurance Co. v. Sand Lake Lounge, Inc., we observed that it is not against the public interest for parties to a contract to agree to a shorter limitations period "if the time agreed upon is not so short as to be unreasonable in the light of the provisions of the contract and the circumstances of its performance and enforcement."68 And in Estes v. Alaska Insurance Guaranty Ass'n, we recognized the validity of a contractual limitation provision but held that, due to the nature of insurance contracts, such provisions are enforceable only when the insurer can demonstrate that it has been prejudiced by the insured's delay in filing suit.69

The insurance provision at issue in Estes required the insured to commence any suit on the policy within one year of the insured's loss.70 We first observed that insurance policies differ from traditional, private contracts because "[a]n insurance contract is not a negotiated agreement; rather its conditions are by and large dictated by the insurance company to the insured."71 Therefore, we reasoned that "time limit[s] on commencement of suit clauses, notice of loss clauses, proof of loss clauses, and cooperation clauses shall all be reviewed on the basis of whether their application in a particular case advances the purpose for which they were included in the policy."72 Concluding that the "primary purpose of contractual modifications of the statute of limitations is to avoid prejudice, specifically to avoid the extra danger of fraud and mistake associated with stale claims,"73 we held:

Thus, we have recognized the enforceability of shortening contractual limitations provisions in insurance policies, subject to a showing of prejudice by the insurer.75 We have not, however, considered whether a contractual provision shortening the applicable statutory limitations period for UM claims violates public policy.

Some courts have held that contractual provisions that modify the statutory limitations period for UM claims are wholly enforceable and do not violate public policy.76 Other courts have held that provisions shortening the limitations period for UM claims are wholly void as against public policy.77 McDonnell essentially argues that we should adopt the reasoning of those courts that hold such limitation provisions are wholly void as against public policy, while State Farm argues that we should adopt the reasoning of those courts that hold unambiguous contractual limitation provisions must be enforced as written.

McDonnell makes several arguments in support of her position that a shortening contractual limitation provision for UM claims violates public policy. She first argues that we have already recognized a "mirror rule" similar to the rule adopted by the Illinois Court of Appeals in Burgo v. Illinois Farmer's Insurance Co.78 The Burgo court addressed the enforceability of a policy provision requiring an insured to commence a lawsuit or arbitration proceedings on a UM claim within one year of the accident.79 The court held that the one-year limitation diminished the statutorily mandated UM coverage and was therefore contrary to public policy and superceded by statute, reasoning: "The contractual limitation may not place an insured in a substantially different position than he would have been had the tort-feasor carried the required insurance coverage."80

Most of the Alaska case law that McDonnell relies on merely recognizes the general rule that an insurance policy provision is unenforceable if void as against public policy.81 She also relies on State Farm Mutual Automobile Insurance Co. v. Harrington, where we held that under former AS 21.89.020(c)(1), the policy limits for UM/UIM coverage must be equal to the liability coverage that the insured has voluntarily purchased.82 We have since referred to this as the "mirror rule"83 or the "mirror-imageoffer requirement"84 of AS 21.89.020(c)(1). This rule was derived from a statutory mandate, however, and there is no corresponding statutory provision governing the limitations period for UM claims. Thus, our "mirror rule" does not apply here.

McDonnell next argues that the two-year contractual limitation provision violates AS 21.09.150(b)(4), which instructs the Director of the Division of Insurance to suspend or revoke an insurer's license if the insurer refuses to pay claims or forces insureds to litigate claims "without just cause" as a general business practice.85 She argues the two-year limitation provision violates this statute by forcing an insured to bring suit against her insurance company to settle her claim. As discussed above, contractual limitation provisions are generally enforceable, and the two-year contractual limitation provision here requires the insured to file suit only if the insurer and insured are unable to settle the claim. The provision does not automatically require an insured to file suit in order to recover insurance benefits, and an insurance company does not act "without just cause" when it relies on the unambiguous terms of the insurance contract.

McDonnell also argues that the two-year contractual limitation provision violates several provisions of the Alaska Unfair Claims Settlement Practices Act "if not in letter, at least in spirit."86 As McDonnell acknowledges, the two-year contractual limitation provision does not directly violate any of the statutory provisions she relies on. We see no direct or "in-spirit" violation of the Unfair Claims Settlement Practices Act in State Farm's contractual limitations period.

Finally, McDonnell argues that the two-year contractual limitation provision conflicts with Alaska's UM and UIM statutes, specifically the statutes requiring an insured to exhaust available remedies before filing a UM or UIM claim with the insurer.87 As discussed above, this potential conflict is not an issue here because there was no other available coverage that McDonnell was required to exhaust before filing her UM claims.

In contrast, State Farm argues that we should hold the two-year contractual limitation provision to be wholly enforceable. But we have already held in Estes that contractual limitation provisions are subject to a showing of prejudice.88 State Farm argues that Estes is "distinguishable and not controlling here," but State Farm does not explain why Estes, which directly addressed the enforceability of a contractual limitation provision in an insurance contract, is not controlling precedent. We note that the Estes principle — requiring insurers to demonstrate prejudice when seeking to enforce a shortening contractual limitation provision — has been reaffirmed by this court,89 recognized as the prevailing law in Alaska by the Ninth Circuit,90 and adopted as persuasive authority by the New Mexico Supreme Court.91 We see no reason to abandon this principle for UM claims.

State Farm also argues that we should defer to the Division of Insurance's approval of Endorsement 6127BN, which contains the contested two-year contractual limitation provision. We have held that the Division's approval of insurance policies is entitled to "some weight,"92 but we have also recognized that the Division's approval is merely a "screening mechanism, meant to catch unlawful insurance policies" and "cannot make an unlawful policy lawful."93 Thus, the Division's approval of the policy here is not dispositive of the issue before us and cannot overrule our holding in Estes requiring insurers to demonstrate prejudice before enforcing a contractual limitations provision.

In short, given that we have previously recognized (subject to the prejudice principle) the validity of contractual limitation provisions in Sand Lake Lounge and Estes, a shorter limitations period for UM claims does not directly violate the statutes governing UM coverage. The Estes prejudice principle establishes a reasonable balance between protecting the insured from a shortened limitations period and protecting the insurer from stale claims; subject to this principle, we hold that State Farm's contractual two-year limitations provision is not void as against public policy. Accordingly, we affirm the superior court's ruling that State Farm's contractual two-year limitation provision is enforceable, subject to a showing of prejudice as required by Estes.

6. Contractual modification of the accrual date

As to when the contractual limitations period begins running, we have previously held in Estes and Sand Lake Lounge that an insurance policy's one-year limitation period "began to run only after the claim was denied."94 However, in those cases we were interpreting a contractual limitation provision that required the insured to file suit within one year of "the inception of the loss."95 We interpreted this phrase to mean "the date on which the insurance company denies coverage, that is, the date on which the cause of action accrues," concluding it would be unreasonable to interpret the phrase to mean the date of the-underlying accident (in those cases, a fire rather than a car accident).96 We reasoned that our holding was supported by an important practical consideration — "[i]n insurance loss cases, adequate preparation of a proof of loss requires a substantial amount of time."97 We also observed that if we were to interpret the contractual limitation provision as commencing on the date of the underlying accident, "the operational effect of that decision would be to reduce the limitation period to considerably less than one year from the date the cause of action accrued."98

Thus, we have previously interpreted an ambiguous contractual limitation provision as commencing on the date the insured's claim against her insurer accrued, meaning the date the insurer allegedly breached the insurance contract. But we have not considered whether a contractual limitation provision that unambiguously modifies the accrual date is enforceable.

McDonnell argues that the two-year limitation provision is unenforceable because it purports to start the limitations period before the insured's cause of action has accrued. Some courts have enforced contractual provisions that modify the accrual date for UM claims.99 Other courts have held that such provisions are unreasonable and, therefore, unenforceable.100 We agree with the latter view.

We start with the premise that, as discussed above, a UM claim arises out of the parties' insurance contract, therefore the cause of action generally accrues when the contract is breached. As the Delaware Supreme Court explained, "there is no justiciable controversy under the contract (here a policy) upon which a party may sue" until the contract is breached, because as long as the parties perform in accordance with the contract, no party has cause to complain.101 It is only when one party contends that the other has violated the contract that a justiciable controversy exists.102

By shortening the accrual date for UM claims, State Farm's contractual limitation provision attempts to shorten the limitations period before an insured like McDonnell has a justiciable cause of action against her insurer. Other courts have found such provisions unreasonable and invalid for this reason. In Nicodemus v. Milwaukee Mutual Insurance Co., the Iowa Supreme Court considered the validity of a contractual limitation provision that attempted to shorten the date of the commencement of the limitations period for UM claims to the date of the accident.103 The Nicodemus court held that "the contractual limitations provision in the [insurance policy], which commences the limitations period before the insured's claim accrues, is unreasonable and, therefore, unenforceable," reasoning that "[a] contractual limitation provision that would require a plaintiff `to bring his action before his loss or damage can be ascertained' is per se unreasonable."104 Similarly, in Kraly v. Vanneivkirk, the Ohio Supreme Court held that "the validity of a contractual period of limitations governing a civil action brought pursuant to the contract is contingent upon the commencement of the limitations period on the date that the right of action arising from the contractual obligation accrues."105 And in State Farm Mutual Automobile Insurance Co. v. Fitts, the Nevada Supreme Court declined to enforce a policy provision that commenced the limitations period for UM and UIM claims on the date of the accident and instead reaffirmed the proposition that an insured's claim against an insurer does not accrue until the insurer breaches the contract.106

We agree that it is illogical and unreasonable to contractually require commencement of the limitations period for a UM claim before the insured has a justiciable cause of action against her insurer. If the limitations period for a UM claim commenced on the date of the accident, the insurer could potentially deny an insured's claim or refuse payment shortly before the limitations period ends, leaving the insured with insufficient time to file suit. Similarly, the insurer could deny the insured's claim shortly after the limitations period ends, thereby barring the insured from filing suit at all. Given these practical considerations, we hold that to the extent State Farm's contractual two-year limitation provision purports to trigger the commencement of the limitations period before an insured's cause of action against the insurance company has accrued, the policy provision is unreasonable and unenforceable. Our holding is consistent with Sand Lake Lounge, where we held that it would be unreasonable to interpret a contractual limitation provision as commencing on the date of the insured's loss, because such an interpretation would considerably reduce the insured's time to file suit once the cause of action actually accrued.107 Accordingly, we affirm the superior court's ruling that State Farm's contractual limitations provision does not commence until the insured's UM claim accrues, which occurs when the insurer has allegedly breached the insurance contract, such as by refusing the insured's request for payment or denying the insured's claim.

V. CONCLUSION

We AFFIRM the superior court's ruling that the mandatory appraisal statute, AS 21.96.035, does not apply to McDonnell's UM personal injury claims. We also AFFIRM the superior court's rulings that the two-year limitation provision in State Farm's insurance policies is enforceable against McDonnell's UM claims, subject to a showing of prejudice, and that the limitations period does not commence until the insurer allegedly breaches the insurance contract.