What is Underinsured Motorists Coverage?

Most folks have not heard of Underinsured Motorists Coverage, and don’t even know if they have it.  It is not required coverage in Kentucky.  It is optional.  If you have it, it will show up on your auto insurance bill as a separate line item of coverage usually titled “UIM.”  Do not confuse it with “UM”, which stands for Uninsured Motorists Coverage, and is on every auto policy in Kentucky. 

We recommend that everyone purchase UIM coverage.  Here’s why.  In Kentucky every vehicle is required to have liability insurance.  Liability insurance on a particular vehicle will pay the damages caused to another person or persons due to the negligence of the driver of that particular vehicle.  In Kentucky the mandatory requirement of liability insurance is $25,000.  Many people buy coverage more than $25,000.  However, many people only buy the minimum coverage of $25,000.  The problem is that auto accidents can cause personal injury damages far in excess of $25,000.  Often medical bills alone exceed $25,000, not to mention lost wages, and pain and suffering all recoverable under the liability policy.  It is in those situations that you need UIM.

UIM (underinsurance coverage) protects you in those situations where the driver that hits you doesn’t have enough coverage.  It is insurance that you purchase as part of you auto coverage to cover your damages over and above the amount of liability coverage on the car that hit you.

Collecting UIM can be tricky.  Often your insurance (UIM) carrier will dispute the amount of your damages and therefore how much, if any, money you should receive.

Another situation that can be dangerous to you is if your damages clearly exceed the liability coverage of the car that hit you, and the liability carrier may recognize this and wish to pay you.  Let’s say the car that hit you had $25,000 in liability coverage and your medicals alone were $50,000.  That liability carrier may call you up and offer their $25,000 limits.  That may seem great and easy.  However, that liability carrier will want you to sign a release when you accept that $25,000.   If you accept that $25,000 and sign a release without consulting with your UIM carrier, under Kentucky law you cannot make a claim for your UIM benefits.  Many people in that situation are struggling due to the wreck and are eager to accept the liability payment.   Many don’t even know if they have UIM, and if they do know, they don’t know that they have to notify their UIM carrier.  Accepting that money without the benefit of any attorney can prevent you from receiving all you are entitled to.

Further, the consultation process with your UIM carrier is a specific process set forth in Kentucky statutes and requires strict compliance.  We recommend that you hire an experienced attorney to help you in this process. 

If you are in a wreck call us to help you through this process, and make sure you collect all of the insurance proceeds you are entitled to.