Kentucky’s financial responsibility laws require certain basic coverages for all motor vehicles garaged in this state. Unfortunately, these coverages have not been increased in decades and the minimum coverage allowed is $25,000 per person and $50,000 per accident. In other words, a negligent driver can cause a very serious accident resulting in hundreds of thousands of dollars of medical expense and wage loss, but they may only have $25,000 in coverage that you can recover. Even worse, many drivers on Kentucky’s roads at any given time are uninsured and have no insurance coverage at all.

At Herren & Adams, we recommend that everyone have as much uninsured and underinsured coverage as possible. It’s important to know that “underinsured” coverage is a separate and distinct coverage from “uninsured” coverage and you should make sure that your insurance agent understands that you want both coverages. Uninsured and underinsured coverage is critical because these are the coverages that you buy that protect your family and yourself in a serious accident caused by an uninsured or underinsured at-fault driver. Ironically, compared to the liability insurance which we all must have, uninsured and underinsured motorist coverage is relatively inexpensive, but unfortunately, many people don’t even know they need these coverages until it’s too late.

There is a well-defined statutory process for making an underinsured motorist claim. Before settling with and releasing the at-fault driver, one must give the underinsured motorist carrier notice of the proposed settlement by certified mail. The underinsured motorist carrier then has thirty (30) days in which to substitute payment of the at-fault driver’s settlement offer if the underinsured motorist carrier wants to preserve its right of subrogation against the at-fault driver. If you think you may have an underinsured motorist claim, please call Herren & Adams before taking any action which might waive your potential underinsured motorist claim.

Umbrella policies provide liability coverage for negligence above an insured’s primary policy. For example, an at-fault driver may have a $300,000 liability policy on their car, and then above that, a $1,000,000 umbrella policy to provide additional protection. Over the years, we’ve seen several situations where a negligent driver caused a serious accident and the insurance company rushed in and quickly offered the underlying policy limits of $100,000 or $300,000 without mentioning the umbrella coverage. Before settling any serious case, it’s important to know that all of the available insurance has been considered.