Under federal law, the Declaratory Judgment Act allows declaratory relief when this law applies to a particular case. A declaratory judgment is a court order that declares the rights and obligations of the parties involved in a personal injury case.To establish federal jurisdiction in a declaratory judgment action, two conditions must be satisfied. First, is the constitutional inquiry. Courts have traditionally held that an insurance company has no right to intervene in the liability action against the insured to seek a coverage determination. Be careful what you ask for in your declaratory judgment action" could have been an appropriate subtitle. San Antonio 1998, pet. This is a declaratory judgment action. Appellee Allstate County Mutual. The question here is whether an insurance carrier's liability for benefits under the UIM policy may be established in a declaratory judgment action.