A crash can leave an injured person facing two very different insurance problems. The responsible driver may have no liability insurance, or the driver may be insured but lack enough coverage for the resulting losses. For drivers comparing uninsured vs. underinsured motorist coverage, Kentucky law treats those situations differently.
Uninsured motorist coverage, commonly called UM, addresses the first problem. Underinsured motorist coverage, or UIM, addresses the second. Both may involve a claim under an injured person’s own auto policy, but their purchase rules, triggering circumstances, and claim procedures are not identical.
Uninsured vs. Underinsured Motorist Coverage: The Basic Difference
The Department’s auto insurance definitions summarize this central distinction. When a crash involves an uninsured or underinsured driver, a Kentucky car accident lawyer can help identify every policy that may apply.
These coverages are not substitutes for collision insurance. Kentucky’s consumer guidance describes UM and UIM as bodily injury coverages, not coverage for damage to the insured vehicle. A vehicle repair or total-loss claim may instead involve the responsible driver’s property-damage liability coverage or applicable collision coverage, depending on the policies and facts.
How Uninsured Motorist Coverage Works in Kentucky
Kentucky’s uninsured motorist statute generally requires a motor vehicle liability policy issued in the state for a vehicle registered or principally garaged here to include UM bodily injury coverage at the statutory limits. A named insured may reject that coverage in writing, and the rejection generally applies to all insureds under the policy. The same insurer ordinarily does not have to include it again on certain renewals or replacement policies unless a named insured requests it in writing.
Having UM coverage does not make payment automatic. The insured must be legally entitled to recover damages from the uninsured vehicle’s owner or operator. Questions about who caused the crash, whether the claimant qualifies as an insured, the nature of the bodily injury, and the applicable policy limit can still affect a claim.
Kentucky’s statutory definition can also treat certain insured vehicles as uninsured for this purpose, including when applicable liability coverage is denied or an insurer cannot pay because of insolvency. Those situations involve details beyond simply asking whether the other driver showed an insurance card.
How Underinsured Motorist Coverage Works in Kentucky
The purchase rule for UIM is different. Kentucky’s underinsured motorist statute requires insurers to make UIM coverage available upon request. That does not mean every Kentucky policy automatically contains it. The declarations page and policy should be reviewed to confirm whether UIM was purchased, its limits, and which people and vehicles qualify.
UIM may apply when the responsible driver has liability insurance but that coverage does not fully address the injured person’s legally recoverable damages. Any payment remains subject to the UIM limit and policy terms that are consistent with Kentucky law. See what to do when an accident exceeds policy limits. A claim therefore depends on more than comparing medical bills with the other driver’s liability limit. Liability, covered damages, available credits or offsets, and all potentially applicable policies may matter.
Additional information about UM and UIM claims is available for people facing either type of coverage gap. UM and UIM coverage can also matter after a bicycle or pedestrian crash caused by an uninsured or underinsured driver.
A UIM Settlement Requires Special Care
A major procedural difference arises when the injured person proposes to settle with the underinsured driver and that driver’s liability insurer. If the settlement would not fully satisfy the injury or wrongful-death claim and would create a UIM claim, current Kentucky law requires written notice of the proposed settlement by certified or registered mail to all UIM insurers providing coverage.
The UIM insurer then has 30 days to consent or preserve its subrogation rights. If it refuses consent to preserve those rights, the statute requires it to pay the injured person the amount of the written liability settlement offer within that period. The statute also addresses when a settlement and release may be finalized without prejudicing the UIM claim.
Because a release can affect rights against the driver and insurers, a proposed liability settlement should be evaluated before it is finalized. The applicable policy, the statutory notice process, and the identity of every potential UIM carrier all require attention.
Uninsured vs. Underinsured Motorist Coverage: Two Quick Examples
An example makes the uninsured vs. underinsured motorist difference easier to see. Suppose a driver runs a red light and hits you, and your injuries are serious.
- The driver has no insurance. PIP pays first for medical bills and lost wages. Your claim for the rest goes to your own insurer under your UM coverage, if you didn’t reject it in writing. Your insurer can raise the same defenses the driver could, including who caused the crash.
- The driver has only $25,000 in liability coverage, but your losses are clearly more. You can claim that $25,000 from the driver’s insurer, then look to your own UIM coverage for losses beyond it, up to your UIM limit, if you bought UIM. Before accepting the $25,000, the written notice to your UIM insurer described above has to be handled correctly.
In both cases, the uninsured vs. underinsured motorist question is decided by the other driver’s coverage, not yours. For a crash where the driver fled, see our hit-and-run page. The uninsured vs. underinsured motorist rules can also overlap when more than one vehicle was at fault, so every policy should be identified.
What to Check After a Crash
Coverage questions are easier to evaluate when the relevant information is collected early. Useful steps include:
- Obtain the declarations page and complete policy, including endorsements.
- Confirm separately whether UM and UIM appear and record each limit.
- Preserve the other driver’s insurance information and the collision report.
- Notify potentially applicable insurers according to the policies and keep copies of correspondence.
- Organize records supporting the claimed injuries and losses.
- Review UIM notice requirements before finalizing a liability settlement or signing a release.
UM and UIM should also be kept separate from Kentucky PIP benefits. The Kentucky Department of Insurance explains that basic PIP coverage generally pays specified economic losses without regard to fault. UM and UIM, by contrast, concern damages legally recoverable because of another driver’s responsibility. Multiple coverages may be relevant to one crash, but each has its own purpose,x limits, and conditions.
Deadlines in an Uninsured vs. Underinsured Motorist Claim
The difference between uninsured vs. underinsured motorist coverage is only part of the timing problem. A UM or UIM claim is usually made under your own policy, but that does not mean the claim can wait until the other driver’s insurer finishes its review. Policy notice provisions can require you to report the crash, and sometimes the coverage issue, sooner than you might expect.
For many Kentucky motor vehicle injury claims, including many uninsured vs. underinsured motorist claims that arise from a crash, a lawsuit generally must be filed within two years of the crash or the last PIP payment, whichever is later (KRS 304.39-230). Other claims can have shorter periods. A policy may also set earlier notice or suit conditions that have to be read together with the statute. Exceptions exist, so the date should be confirmed from the policy and the facts. Our Kentucky statute of limitations guide and statute of limitations calculator can help you start that review.
UIM claims have an extra timing rule already discussed above: written notice of a proposed liability settlement generally must go to the UIM insurer, which then has a short period to consent or protect its rights. Missing that step can create problems that are separate from the two-year filing period. UM claims can raise different issues, including proof that the other driver was uninsured or cannot be identified, which should be documented early.
PIP benefits, UM and UIM can all apply to the same crash, but each has its own purpose and its own clocks. Do not assume that an open liability file, a pending medical appointment or a verbal statement that the claim is “under review” extends the time to give notice or to file. If an uninsured vs. underinsured motorist question is still unresolved as a deadline approaches, talk with a lawyer about protecting the claim while the coverage issues are sorted out.
It also helps to gather every policy that might apply, not only the one for the car you were driving. Household vehicles, a policy that lists you as a resident relative or a separate policy on a family member can sometimes matter in an uninsured vs. underinsured motorist review. Keep the declarations pages and the complete policy forms together with your notice letters and the liability settlement correspondence, so deadlines and coverage questions can be checked from the same file.
Discuss a Kentucky UM or UIM Claim With Forman & Associates
Questions about uninsured motorist coverage in Kentucky or underinsured motorist coverage in Kentucky often turn on the exact policy language, the other driver’s coverage, and how the crash occurred. Forman & Associates can review the facts of a Kentucky injury matter and help identify the next steps.
To discuss a possible UM or UIM claim, request a free case evaluation.
