Uninsured/Underinsured Motorist Insurance Claims
Many people are driving without insurance. This creates a problem for those they injure while driving. Additionally many times the insurance a person may have on their vehicle is not enough to fully cover the damage they do.
In Kentucky the minimum insurance a person is required to carry is 25/50 for bodily injury and 10,000 for property damage. This means that if a person with minimum state insurance coverage is liable for injuries there is 25,000 max for each person they injure and a maximum of 50,000 for everyone. So the most any one person can recover through insurance from them is $25,000 and the most a collective group of injured people can recover is $50,000.
In cases of serious injury or death the state minimum insurance limits do not come close to covering the damage that can be done in an automobile accident. This is why it is important to have Uninsured motorist coverage (UM) and Underinsured Motorist Coverage (UIM). In Kentucky UM coverage is a mandatory coverage. This means that it is offered standard on every policy. However, a person can reject UM coverage. This must be done by signing a written waiver which the insurance company must keep on file. If an insurance company states that there has been a waiver of UM coverage make sure to get a copy of the waiver to verify.
UM and UIM claims are called first party insurance claims or actions. This means that the person who buys the insurance is the one making the claim against their own insurance company. Because the claim is being made against your own insurance company, you might think that it would be easier or your insurance company would be fair. Do not count on it. It is important to have an attorney represent you, especially against your own insurance company. Your insurance company will use anything they can against you to deny or minimize your claim.
One major difference between Kentucky and Indiana when it comes to UM/UIM insurance is what is called “stacking.” In Kentucky you can “stack” as many UIM policies as you have access to on top of each other for maximum recovery. In Indiana you can only receive the maximum of the highest policy.
Example 1: If Bill is riding in Donald’s car and they are struck by and Uninsured Driver, Bill can recover through Donald’s Uninsured Motorist Coverage. But if Bill still has injuries that are not covered by Donald’s UM coverage, Bill can collect from his own policy of UM insurance.
Example 2: If Sally and her husband have three cars and carry a UM policy on each of the three cars of $25,000 then Sally can claim against each policy for a total of $75,000. The key is that each UM be a separate policy/endorsement/rider. This means that the premium has to increase for each new UM coverage added. Many insurance companies are starting to write a global policy with only one UM/UIM coverage. Any UIM/UM coverage on the policy also protects any relative living in the household.
Example 3: If Tonya is a college student is injured by an underinsured motorist while living at college she can still make a claim against her parents’ UM/UIM coverage for any car they have back home if you can show that she is still a “resident” of the parent’s household.
By contrast in Indiana you can only recover the amount of the biggest policy you have access to. For example, if you are hit by a person with $100,000 in coverage and you have $100,000 in UM/UIM coverage you could not make a claim against your own UM/UIM coverage. However, if you have $250,000 in UM/UIM coverage you can recover up to $250,000 total, $100,000 from the person who hits you and $150,000 from your own UM/UIM insurance for a total of $250,000.
Since UM/UIM insurance is contract based any lawsuits brought against your insurance company are actually contract claims. Ordinarily a contract statute of limitations applies to UM/UIM cases. However, some insurance companies try to limit the time in which to make a claim or file a lawsuit. Ordinarily someone would have fifteen (15) years to bring a contract lawsuit under KRS 413.090. However, because insurance companies started writing policies with shorter periods of time to bring a claim the courts were forced to create a limitation. The courts have decided that a UM/UIM claim statute of limitations cannot be shortened below the time in which the driver would have to bring a claim against the at fault driver.