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Car Insurance: Is My Family Really Protected?

By J.A. Sowell, Attorney

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J.A. Sowell

Reprinted from SOKY Happenings article 4.30.20

Picture this – it is Monday evening. You are driving down Campbell Lane with your two children in the backseat headed to grab a quick dinner after soccer practice. As you approach the intersection with Scottsville Road, you have the green light. Then, out of nowhere, a pick-up truck unexpectedly tries to turn left in front of your vehicle. Despite going the speed limit and paying attention to the road, there is nothing that you can do to avoid the collision. Boom! The pick-up truck rams into your vehicle, causing it to spin out and incur significant damage. You and your kids sustain neck and back injuries from the impact. The other driver is clearly at fault. No big deal, though… his insurance will surely cover the property damage, as well as the medical bills, lost wages, and pain and suffering you endured, right?

Well… maybe. According to the Insurance Research Council, there is a 13% chance that the driver who hit you does not have any insurance at all – even though Kentucky law requires every driver to maintain a certain level of insurance coverage. There is also a good chance that while the driver has car insurance, he only carries the minimally required coverage, which may not be enough to fully cover the damages you sustained from the accident he caused.

So, what can you do to make sure your family is protected in a situation like this? You can prepare for these unimaginable situations by obtaining uninsured and underinsured motorist coverage on your automobile insurance policy.

Required Car Insurance Coverage

Before explaining the need for uninsured and underinsured coverage, it is important to first understand the amount of car insurance required in Kentucky. Pursuant to Kentucky law, all drivers are required to maintain $25,000 in property damage coverage, as well as $25,000 in liability coverage for all claims of bodily injury damages per person and not less than $50,000 for all claims of bodily injury damages per accident. This means that in the above scenario, if the driver carries the minimal coverage required by Kentucky, he has $25,000 in liability coverage for each individual in your vehicle but only up to $50,000 total for all individuals in your vehicle.

In addition, Kentucky law requires that each policy carry $10,000 in Personal Injury Protection (“PIP”) benefits. You likely already have this coverage on your current policy, unless you rejected it. PIP benefits are commonly referred to as “no-fault” benefits. They are available to each person in the covered vehicle, regardless of whether that vehicle was the at-fault party or not. They can only be used to pay for a person’s medical bills and/or lost wages resulting from an accident.

As an attorney, having represented many individuals involved in car accidents, I can assure you that the minimal coverage required by Kentucky law is not enough to compensate you should you be injured in an accident, especially if there are other injured parties in your vehicle such as your own family. This is why uninsured and underinsured coverage is a necessity.

Uninsured and Underinsured Motorist Coverage

Uninsured motorist coverage pays for your damages when the other driver does not have any insurance or if the driver flees the accident scene and cannot be located. However, uninsured coverage does not cover property damage, only bodily injury damages. Collision/comprehensive coverage is needed to cover property damage when the other driver is uninsured. Underinsured motorist coverage pays for your damages when the other party does not have enough insurance. Both are equally important.

Back to the above scenario, let’s assume that you and your kids have medical bills in the amount of $105,000 as a result of the collision ($35,000 per person). This includes bills for an ambulance ride to the hospital, emergency room charges, multiple appointments with an orthopedic specialist, physical therapy and other pain management – a very common course of treatment for neck and back injuries sustained in a car accident. After applying each of your PIP benefits ($10,000 per person), there remains $75,000 in medical bills that have to be paid.

What now?

If the driver does not have any insurance, you are going to have to dig deep into your own pockets and pay those bills, along with the costs to repair your damaged vehicle. Nobody wants to be in that situation. If uninsured motorist coverage was purchased, let us say in the amount of $50,000 per person, up to $100,000 per accident, a claim could then be made on the uninsured coverage portion of the policy to help pay for the outstanding $75,000 in medical bills, plus some extra money for pain and suffering and any future treatment.

If the driver does have insurance, but only carries the minimal coverage required in Kentucky, there will still be medical bills outstanding after applying those benefits. Because there is $75,000 in unpaid medical bills, you will exhaust the limits on the driver’s minimal liability policy of $25,000 per person/$50,000 per accident. Applying the $50,000 to the unpaid medical bills, there will be $25,000 in medical bills left over. This is where underinsured coverage comes into play. If it was purchased in the same amount as uninsured coverage ($50,000 per person/$100,000 per accident), which is typically the case, a claim could then be made on the underinsured portion of the policy to help pay for the outstanding $25,000 in medical bills, plus some extra money for pain and suffering and any future treatment.

Now that you hopefully understand the importance of having uninsured and underinsured motorist coverage, I am sure you are thinking – how much is it going to cost me?

Cost of Extra Insurance

While it depends on the policy provider and the other coverages already included on the policy, the cost of adding extra insurance is relatively low. In reviewing different examples of policies, an insurance company offered a client $25,000 of uninsured coverage for $60 per year and $60 per year for the same amount of underinsured coverage. Another company provided $50,000 of uninsured coverage for $24 per year and $50,000 of underinsured coverage for $70 per year. A different company provided $100,000 of uninsured coverage for $38 per year and underinsured coverage in the same amount for $190 per year.

In my opinion, the cost is well worth the peace of mind. Knowing there is sufficient insurance to cover your family, and ensure that you can afford and receive the medical care needed following a car accident, is invaluable. Most people do not realize the importance of having enough insurance until it is too late. I encourage you to be proactive and prevent finding yourself in that situation.

If you have been in an accident, or simply have questions regarding your insurance, I would be glad to assist you. Feel free to contact me, J.A. Sowell, at 270-799-0889 or jasowell@elpolaw.com.

-J.A. Sowell