What happens when the other driver doesn't have insurance?
How uninsured and under-insured coverage protects Kentucky motorists
In Kentucky, it's illegal to drive a car without insurance.
Kentucky has penalties for those who drive without insurance.
First, the vehicle's registration is revoked. The owner can be fined between $500 and $1,000, or serve up to 90 days in jail.
But that doesn't stop some people from getting behind the wheel without a valid policy.
Victims of auto accidents need to put their lives back together. That means expensive medical bills, time away from work and family and major car repairs.
Unless you're sitting on a goldmine, that means making an insurance claim; be it your own insurance, or the other driver's insurance.
But what happens if the other driver is driving without insurance?
Many accident victims want to pursue the at-fault party, personally, for damages.
But this strategy can only succeed if the at-fault person is "collectible," meaning they have assets to collect against. But most people who drive without insurance have little in the way of personal assets.
That's where uninsured and under-insured coverage can help.
Uninsured motorist coverage
When an uninsured driver is responsible for a collision that injures another person, the victim may be able to make an uninsured motorist claim.
This would be a settlement with the victim's own insurance company, in place of the other driver's insurance. Uninsured motorist coverage also applies in hit-and-run accidents where the at-fault party cannot be identified.
In such a situation, the victim would contact his or her insurance company and open a claim. The victim would be able to make a recovery for medical bills, lost wages, as well as pain and suffering.
What are policy limits?
The coverage available under an insurance policy is defined by the policy limit.
Under Kentucky law, state minimum coverage is $25,000 per victim and $50,000 per accident. This coverage level is often described as "25-50."
This means that up to $25,000 in coverage is available to each injured party, up to a total of $50,000 for all parties involved. The state minimum also provides for $10,000 in property damage coverage, which usually goes to car repair or replacement.
So what happens if the coverage available is insufficient to cover the damages?
Under-insured motorist coverage
Sometimes, damages incurred during an auto accident exceed the coverage available. Using the example above of a state-minimum policy with limits of $25,000-$50,000, individual damages of more than $25,000 would represent an under-insured coverage exposure.
In this case, the liability carrier -- the other guy's insurance -- would be expected to tender an offer for its policy limits of $25,000. The victim's insurer, often referred to as the first-party carrier, would then tender an offer to cover the difference.
If, for example, the damages total $30,000, the under-insured carrier would be expected to offer an additional $5,000.
Policy stacking
Kentucky is unique in the fact that it allows victims to "stack" under-insured policies. This means that every available can be "stacked" to ensure the maximum recovery.
If, for example, the victim has multiple vehicles insured, each under-insured policy can be used to make a recovery. A policy belonging to a household member can also extend to a victim.
Negotiating a settlement
People involved in traffic collisions might mistakenly believe that, because they're pursuing a claim against their own insurance company, that there won't be a negotiation. They might believe that all their years of paying premiums might have earned them an offer that covers their full damages.
Nothing could be farther from the truth.
Insurance companies make money by collecting premiums and paying out as little in claims as possible. That means that victims pursuing an uninsured or under-insured motorist claim will likely receive a quick, low-ball offer from their insurance company.
Until you've completed your medical treatment, it's impossible to know the value of your claim. There's no obligation to accept the insurance company's initial offer, even if it's your own insurance company.
Before accepting a meager offer, it's worth it to consult with a personal injury attorney who understands claims from the liability side, as well as the uninsured motorist side.
If you've been involved in an accident with an uninsured driver, contact the Kentucky injury attorneys of Dallas & Turner. Our firm has made numerous successful settlements on cases where the at-fault party was uninsured.
James Ryan Turner, Experienced Injury Lawyer in Florence, KY
If you or a loved one have been injured, speak to an experienced injury lawyer today. We offer free consultations, and we don't get paid until we get you the money you deserve.