Reviewed by Larry Forman, Attorney.
A serious crash can cause hospital bills, lost income and long-term harm that add up to far more than the at-fault driver’s insurance will pay. Many Kentucky drivers carry only the legal minimum. When an accident exceeds policy limits, the insurer will often offer its limit and ask for a full release. Before you sign anything, it’s worth knowing where else compensation may come from.
Kentucky’s minimum coverage is low
As of this writing, Kentucky requires liability coverage of at least $25,000 per injured person and $50,000 per accident for bodily injury, plus $25,000 for property damage, or a $60,000 single limit (KRS 304.39-110). Your own no-fault PIP coverage pays up to $10,000 of economic loss first (see our Kentucky auto insurance coverage guide). For a broken neck, a surgery or a death, those numbers run out quickly.
Where else the money can come from when an accident exceeds policy limits
- Your underinsured motorist (UIM) coverage. UIM pays when the at-fault driver’s liability coverage is too small for your losses (KRS 304.39-320). Learn more on our underinsured motorist lawyer page.
- Other at-fault parties. A trucking company, an employer whose driver was on the job, a bar that overserved a drunk driver, a road contractor or a vehicle maker can each carry separate insurance. Kentucky divides fault among everyone responsible (KRS 411.182).
- Other policies. Umbrella policies, a vehicle owner’s policy when someone else was driving, and business auto policies can stack on top of the driver’s own coverage.
- The at-fault driver personally. A verdict above the limits is a judgment against the driver. Whether it can be collected depends on their assets.
- The insurer, in some cases. An insurer that unreasonably passes up a fair chance to settle within limits can face a bad-faith claim. See our insurance bad faith lawyer page.
Don’t sign the release too soon: the UIM notice rule
This is where people lose coverage. If you accept the at-fault driver’s limits and sign a release without first notifying your own UIM insurer, you can put your UIM claim at risk. Under KRS 304.39-320, you send written notice by certified or registered mail to your UIM carrier of the proposed settlement. It then has 30 days to either allow the settlement or pay you that amount itself to preserve its right to pursue the at-fault driver. Kentucky courts often call this the “Coots” procedure. Getting it right protects both claims.
How to find out what coverage exists when an accident exceeds policy limits
- Request the policy limits in writing from the at-fault driver’s insurer.
- Ask whether the driver was working, driving someone else’s vehicle, or has an umbrella policy.
- Gather your own declarations pages, including every household vehicle’s policy.
- If a lawsuit is filed, insurance policies are discoverable (CR 26.02(2)).
Uninsured vs. Underinsured
If the other driver had no insurance at all, the claim runs through your uninsured motorist coverage instead. Our post on uninsured vs. underinsured motorist coverage explains the difference, and our uninsured motorist lawyer page covers those claims.
Deadlines still apply when an accident exceeds policy limits
For most Kentucky car crash injury claims, the lawsuit deadline is two years from the injury or the last PIP payment, whichever is later (KRS 304.39-230). UIM policies can have their own requirements, so read yours early.
Why the lawyer matters when an accident exceeds policy limits
Larry Forman has tried 50+ jury trials and won 95% of them. Insurers know when a lawyer is ready to try a case, and that matters when every available policy is on the table. For more on how claims are valued, see our Kentucky car accident settlement guide and our Louisville car accident lawyer page.
Frequently asked questions
What if my injuries are worth more than the other driver’s insurance in Kentucky?
You may still have options: your own underinsured motorist (UIM) coverage, other people or companies who share fault, an employer’s policy if the driver was working, umbrella policies, and in some cases the at-fault driver personally. A lawyer can check each one before you sign a release.
What are Kentucky’s minimum car insurance limits?
As of this writing, KRS 304.39-110 requires at least $25,000 per person and $50,000 per accident for bodily injury, plus $25,000 for property damage, or a $60,000 single limit.
Can I settle with the at-fault driver’s insurer and still make a UIM claim?
Yes, but follow the notice steps in KRS 304.39-320 first. Before you accept the liability limits and sign a release, you send written notice by certified or registered mail to your UIM carrier, which then has 30 days to decide whether to pay the same amount itself to keep its right to pursue the at-fault driver.
How do I find out how much insurance the other driver has?
Ask the insurer in writing, and your lawyer can request a sworn statement of coverage. If a lawsuit is filed, policies are discoverable under Kentucky’s civil rules (CR 26.02(2)).
Can the insurance company be liable for more than its limits?
Sometimes. If an insurer unreasonably refuses a fair chance to settle within its limits, Kentucky’s Unfair Claims Settlement Practices Act (KRS 304.12-230) and bad-faith law may come into play. These claims depend heavily on the facts.
Injuries bigger than the policy? Talk to us first.
Tell us what happened. We’ll explain your options and what to do next. The consultation is free. Get a free case evaluation or call (502) 931-6788. Our office is at 1139 S. 4th St., Louisville.
This post is general information about Kentucky law, not legal advice. Every case is different.
