Is Underinsured Motorist Coverage Necessary in Light of Kentucky’s Mandatory Insurance Requirements?Posted on February 18th, 2011 No comments
Underinsured Motorist Coverage (UIM) is the cousin of Uninsured Motorist Coverage (UM). (To read our earlier post on UM coverage click, here.) UM coverage protects you if you’ve been involved in an accident with a driver who does not carry the minimum coverage required under Kentucky law. But, what is UIM coverage? Do you still need it in light of Kentucky’s mandatory minimum insurance requirements?
UIM coverage protects you from an “underinsured” driver who causes an accident. This “underinsured” driver carries at least the mandatory minimum insurance in accordance with Kentucky law, but her insurance is not “enough” insurance to cover the damages she caused.
If an accident is caused by another driver and the damages you’ve incurred exceed the amount of insurance the other driver has available, UIM coverage allows you to recover the difference. This coverage is purchased by you as “insurance” against harm caused by an “underinsured” driver. It is provided by your own policy of car, truck, or motorcycle insurance.
A typical example is if you are struck by a driver who carries the minimum liability insurance required under Kentucky law of $25,000.00. If you incurred $50,000 in compensable damages, then the other driver would be “underinsured” by approximately $25,000.00. Imagine the devastating impact this would have on you and your family if you were seriously injured and unable to work or left with permanent lifelong injuries.
However, if you had purchased the minimum UIM coverage of $25,000.00, you could recover that $25,000.00 difference. If you purchased more in UIM coverage, you could potentially recover the entire amount, if your damages warranted it.
Unfortunately, I have come across many clients who do not purchase this coverage. Like UM, many people do not understand it’s importance. They elect, sometimes on their own, sometimes at their agent’s suggestion, not to purchase UIM insurance.
Unfortunately, it is not mandatory that insurance companies offer UIM insurance under current Kentucky law. While many companies offer UIM coverage along with UM coverage, many companies chose not to offer it, unless you specifically ask for it. Unfortunately, many people do not understand insurance coverage and either wrongfully elect to forgo this important insurance, or they are confused, thinking they have purchased the insurance, when in fact they have not.
Understand that every policy of insurance sets forth the types and amounts of coverage available under the insurance policy. This form is called a “declaration page”. If your declaration page does not have any dollar amounts listed next to the sections titled “UM” or “UIM” coverage or UM/UIM coverage, then you should clarify with your agent whether or not you do in fact have that coverage. If you don’t have it, get it.
Kentucky’s mandatory insurance requirements are insufficient to protect you in the event you are seriously injured in an car, truck or motorcycle accident. UIM insurance is absolutely necessary if you want to be protected against the negligence of an underinsured driver. Don’t trust that other drivers will comply with Kentucky’s requirement of minimum liability insurance, or if they do that they will purchase enough insurance to cover you if your injured. Take steps to see that you’re protected.