Underinsured Motorist Coverage

Kentucky Underinsured Motorist Coverage

Kentucky’s minimum insurance requirement leaves a real coverage gap between what a driver is required to carry and what a serious crash actually costs. Underinsured motorist coverage exists to close that gap, but only when the claim is built and documented correctly from the start.

Kentucky’s $25,000 Minimum Leaves a Real Gap

Kentucky permits minimum split liability limits of $25,000 per injured person, $50,000 per accident for bodily injury, and $25,000 per accident for property damage, or $60,000 combined single limits, under KRS 304.39-110. Serious injuries can exceed the available liability coverage. UIM may provide an additional source of recovery when the policy covers the injured person and the documented damages remain uncompensated.

How Kentucky’s UIM Statute Works

KRS 304.39-320 makes UIM coverage available upon request and addresses uncompensated damages above the responsible driver’s liability coverage, subject to UIM limits and applicable terms. It also sets procedures for a proposed liability settlement: written notice by certified or registered mail, and a 30-day period for the UIM insurer to consent or preserve subrogation through an advance. Review these requirements before signing a release.

Stacking UIM Coverage Across Multiple Vehicles

Kentucky policyholders who insure multiple vehicles on the same policy, or who hold separate policies covering multiple household vehicles, may be able to stack UIM coverage, increasing the total available limit beyond a single vehicle’s stated coverage. Whether stacking applies depends on the specific policy language and how the vehicles are insured, which is why reviewing the actual policy documents early in a claim matters as much as reviewing the crash report itself.

Rideshare and Commercial Coverage Gaps

Rideshare and delivery drivers often carry personal auto policies that exclude coverage while the app is on and a fare is active, relying instead on the rideshare company’s contingent liability coverage during that window. Those contingent policies can carry lower limits than a standard commercial policy, and disputes frequently arise over whether the driver was logged in, en route to a pickup, or actively transporting a passenger at the moment of the crash. When the at-fault party in a crash is a rideshare or delivery driver, identifying which policy applies, and at what limit, becomes a critical first step before a UIM claim can even be evaluated.

Common Underinsured Motorist Scenarios

UIM claims commonly arise after a crash involving a driver who carries only Kentucky’s minimum liability limits, a commercial driver whose employer’s policy limits fall short of a catastrophic injury’s true cost, a rideshare or delivery driver operating with inadequate personal coverage between paid trips, or a multi-vehicle crash where liability gets divided among several at-fault drivers, each with limited coverage. In each scenario, the injured person’s own UIM policy becomes the source of additional recovery once the at-fault coverage runs out.

A $25,000 Liability Policy and $100,000 in UIM

Suppose covered, proven damages total $150,000, the responsible driver’s liability coverage pays $25,000, and $100,000 of applicable UIM coverage is available. The remaining damages are $125,000. Subject to policy terms and applicable law, the UIM coverage may pay its full $100,000 limit, leaving $25,000 uncompensated. The liability payment is credited against total damages; it is not automatically subtracted from the UIM limit.

Documenting a UIM Claim

A strong UIM claim requires the same quality of thorough documentation as a claim against an at-fault driver: complete medical records showing the full injury and treatment history, wage records establishing lost income, expert opinions on future medical needs for serious injuries, and a clear, itemized accounting of how the at-fault driver’s liability payout was applied. Because a policyholder is effectively making a claim against their own insurer, that insurer will scrutinize the file closely, which makes early, thorough documentation especially important.

Notifying the UIM Carrier Early

Kentucky’s UIM statute contemplates that an injured person’s own insurer gets a fair opportunity to evaluate a claim before any settlement with the at-fault driver becomes final, which is why many policies require prompt written notice once a UIM claim becomes likely. Waiting until after the liability settlement is signed to notify the UIM carrier can create disputes over whether proper notice was given, disputes that have nothing to do with the actual injury but can still delay or reduce a valid recovery. Sending that notice early, in writing, and confirming the UIM carrier’s receipt of it protects the claim before it becomes contested by the very insurer meant to provide the additional coverage.

Calculating Damages in a UIM Claim

A UIM claim considers documented medical expenses, lost income, diminished earning capacity, and pain and suffering tied to the injury. Recovery depends on uncompensated covered damages and the applicable UIM limit. Under KRS 304.39-320(5), the liability-limit credit generally reduces total damages, subject to the statute’s multiple-claim exception; it does not automatically reduce the UIM policy limit. Evidence of future treatment and lasting impairment therefore matters.

Insurance Company Tactics on UIM Claims

An insurer facing its own policyholder’s UIM claim is still a business trying to limit its payout, despite the appearance of representing the same person paying the premium. Common tactics include disputing the severity of the injury, arguing that pre-existing conditions account for some or all of the claimed damages, delaying the claim while requesting the same records repeatedly, and offering a quick, low settlement before the full extent of treatment and cost is known. Recognizing that a UIM insurer is not a neutral party helps set realistic expectations for how the claim will unfold.

Medical Payments Coverage Alongside UIM

Many Kentucky auto policies also include medical payments coverage, sometimes called MedPay, which can pay medical bills regardless of fault and separately from a UIM claim. MedPay proceeds typically do not reduce a later UIM recovery, meaning a policyholder who carries both types of coverage may be able to use MedPay to cover early treatment costs while the liability and UIM claims are still being built. Reviewing the full policy, including the liability, UIM, and MedPay sections together, helps a case team identify every available source of recovery.

Protecting a UIM Claim From the Start

Because a UIM claim depends on first exhausting the at-fault driver’s liability coverage, the sequence and documentation of that first settlement matters enormously. Accepting a quick settlement from the at-fault driver’s insurer without properly notifying the UIM carrier, or without preserving the right to pursue the remaining damages, can jeopardize the UIM claim entirely. Kentucky requires specific notice procedures before settling with an at-fault driver when a UIM claim is anticipated, making early legal guidance valuable well before any settlement is finalized.

UIM Claims Involving Multiple At-Fault Drivers

A single crash sometimes involves more than one at-fault driver, such as a chain-reaction collision on the interstate or a case where a second driver contributed to the crash after the initial impact. When liability is divided among multiple drivers, each carrying separate and often minimal policy limits, the combined liability payout can still fall well short of a serious injury’s true cost. In these cases, a UIM claim may need to account for multiple liability settlements before the UIM carrier’s own responsibility can be calculated, adding another layer of documentation to the claim.

Track the liability limits, actual payments, and settlements involving every responsible driver. The applicable credit is evaluated against total damages under KRS 304.39-320, including its exception for certain multiple-claim situations. This accounting helps establish the covered losses that remain uncompensated and preserves the documentation needed for the UIM claim.

Kentucky Drivers Often Skip Adequate UIM Coverage

Kentucky does not require every driver to purchase UIM coverage. KRS 304.39-320 requires insurers to make it available upon request. Review all potentially applicable policies, the injured person’s insured status, limits, and coverage terms; absence of UIM on one personal policy does not establish that no other applicable coverage exists.

How Sam Aguiar Injury Lawyers Handles UIM Claims

Every underinsured motorist client at Sam Aguiar Injury Lawyers works with a dedicated three-person case team: a top-rated attorney, an experienced case manager, and a legal assistant, all focused on documenting the full extent of the injury before any settlement is finalized. The firm’s Bigger Share Guarantee® means the client’s share of any recovery is always larger than the firm’s fee after bills, liens, and costs are paid, and clients pay $0 out-of-pocket for the life of the case. Learn more about related uninsured motorist claims, how the firm approaches insurance bad faith when a UIM carrier mishandles a claim, and see the firm’s dedicated Louisville car accident representation.