By Bob Young, Attorney
English, Lucas, Priest and Owsley, LLP
Every car owner in Kentucky is required to carry liability insurance on their automobile. Liability insurance means that if you are involved in an accident with another vehicle, and you are at fault, your insurance will pay for the damages to the other vehicle and for their injuries.
But what happens if you’re involved in an accident, it’s the other person’s fault and the other person isn’t carrying the required insurance? Or what if your injuries or your passenger’s injuries are greater than the coverage the other person is carrying?
If the at-fault drivers has no coverage, that would mean your own uninsured motorist insurance policy would pay the bills for your treatment and cover the pain and suffering for injuries suffered by you or anyone in your vehicle. If the at-fault driver does not have sufficient coverage, underinsured motorist coverage, again, on your own policy, would cover these bills and damages, to the extent the at-fault driver does not have adequate coverage.
Uninsured versus Underinsured
Simply put, uninsured motorist insurance pays when the other party doesn’t have insurance. Underinsured motorist insurance pays when the other party doesn’t have enough insurance.
Both of these types of insurance can be part of your auto insurance policy for not too much additional cost, and I can’t stress enough how much you need these policies. With the rising cost of medical bills, co-pays and deductibles, it’s easy to exceed the amount of coverage of the adverse party or worse, if they have no coverage at all. If you’ve had the same policy for years and haven’t reviewed or updated it, you may not have this necessary coverage.
It’s easy to let this slip past you. We see it all the time. Perhaps you have a good insurance agent that you trust; the policy automatically renews; and suddenly a decade has gone by without giving any real thought to the value of your policy versus costs you might incur if you’re involved in an accident.
What Kentucky Law requires
The Kentucky Law that mandates insurance coverage was passed in 1974. It mandates that every motor vehicle owner must carry at least $25,000 per person and $50,000 per accident liability insurance coverage. Think about this: the required minimum coverage has not been updated since 1974. In addition, the policy must cover $10,000 in property damage benefits. You carrier must also include $25,000 of uninsured coverage in your policy, unless you reject it. Underinsured coverage is not required under Kentucky law. It is optional coverage offered by your insurance company.
Having represented many, many people over the years who have been involved in car accidents, I can tell you, the minimum coverage required by Kentucky law is not enough coverage. If you don’t know how much coverage you have, get out your insurance policy and read it. You’ll find the coverage in your policy. If you don’t, call your agent or insurance company and ask about adding it. You may be surprised how inexpensive it is.
Cost of extra insurance is low
I pulled several policies to look at the cost of this coverage. Safe Auto offered a client $25,000 of uninsured coverage for $60 per year and $60 for the same amount of underinsured coverage. A State Farm policy provided $50,000 of uninsured coverage for $24 per year and $50,000 of underinsured coverage cost $70 per year. Finally, a Kentucky Farm Bureau policy provided $100,000 of uninsured coverage for $38 per year and underinsured coverage in the same amount for $190 per year. (Note: we are not recommending any particular insurance company, just using these companies as examples of the cost of insurance.)
I pulled out my own policy to see what I’m paying for my uninsured and underinsured policies. For $500,000 in coverage for both uninsured and underinsured (combined), I’m paying $192.50 for uninsured motorist coverage and $203.70 for underinsured motorist coverage annually. I consider it well worth my money. Think of this: if I’m driving my SUV, and my wife and four daughters are with us, and God forbid we are in an accident and all six of us end up in the hospital, that bill could be quite high, quite fast, even just to go to an Emergency Room for observation. Our uninsured and underinsured coverage makes sure that we’re able to afford all of the medical care that we need, without fear of the bills headed our way.
I just settled a case in which our client suffered significant injuries in an accident in which the other driver was not paying attention. Our client’s medical bills alone were $102,000. The at-fault party had $100,000 in liability coverage, which is four times the minimum required by Kentucky law. Without health insurance, the medical bills alone would have exceeded the liability coverage. There would have been no compensation for lost wages, lost income in the future, impairment or pain and suffering. Fortunately, our client had the fortitude to have purchased significant underinsured coverage. The few hundred dollars worth of protection and investment resulted in a $250,000 resolution of the underinsured claim.
If you’ve been involved in a car accident, I’d encourage you to seek a qualified, experienced attorney right away. I would be glad to assist you. You can reach me, attorney Bob Young, at (270) 781-6500 or firstname.lastname@example.org