Part III - How Does UIM Work?
In Kentucky Uninsured Motorist Coverage (UM) and Underinsured Motorist Coverage (UIM) are different items of automobile insurance coverage. You can have one and not the other on your policy, so you need to carefully review your coverage. What is the difference? UM comes into play when you are hit by a driver with no insurance. UIM comes into play if you are in an accident caused by a driver who is insured, but whose insurance is not enough to cover all of your damages.
To understand the importance of UIM, it is helpful to understand how liability coverage works. In Kentucky car insurance is required by law, but there are limits on how much insurance you must have. For a regular car or truck (not a commercial vehicle) Kentucky law requires liability insurance for bodily injury claims of $25,000 for one person injured, but not more than $50,000 for all of the people injured in one accident. Obviously there can be more than two people injured in an accident, so coverage for each person can be some small share of $50,000. That is what is called "minimum limits" liability coverage. Increasingly we see insurance companies advertising "state minimum coverage" or that they "keep you legal for less." Those companies are pushing minimum limits coverage, and, in today's economy, many people are buying it.
What that means for you as a driver or pedestrian is that you may be hurt in a car accident that is clearly another person's fault, but he or she may not have the insurance or money to pay you everything you deserve and need. I have many clients with medical bills that exceed $25,000. If you are taken by helicopter from the scene of an accident you may have a bill exceeding $10,000 before you even arrive at the hospital. Even if my client has health insurance, he or she can be financially devastated by the co-pays, deductibles and uncovered medical services required. Injury victims are also entitled to money for lost wages and pain and suffering. If there is not enough liability insurance to pay these claims, you can recover them from your own UIM coverage. The beauty of UIM coverage is that you can control how much you have. You can buy UIM on the vehicles in your own household and basically insure the other drivers on the road in case they injure you.
In Kentucky Uninsured Motorist Coverage (UM) and Underinsured Motorist Coverage (UIM) are different items of automobile insurance coverage. You can have one and not the other on your policy, so you need to carefully review your coverage. What is the difference? UM comes into play when you are hit by a driver with no insurance. UIM comes into play if you are in an accident caused by a driver who is insured, but whose insurance is not enough to cover all of your damages.
To understand the importance of UIM, it is helpful to understand how liability coverage works. In Kentucky car insurance is required by law, but there are limits on how much insurance you must have. For a regular car or truck (not a commercial vehicle) Kentucky law requires liability insurance for bodily injury claims of $25,000 for one person injured, but not more than $50,000 for all of the people injured in one accident. Obviously there can be more than two people injured in an accident, so coverage for each person can be some small share of $50,000. That is what is called "minimum limits" liability coverage. Increasingly we see insurance companies advertising "state minimum coverage" or that they "keep you legal for less." Those companies are pushing minimum limits coverage, and, in today's economy, many people are buying it.
What that means for you as a driver or pedestrian is that you may be hurt in a car accident that is clearly another person's fault, but he or she may not have the insurance or money to pay you everything you deserve and need. I have many clients with medical bills that exceed $25,000. If you are taken by helicopter from the scene of an accident you may have a bill exceeding $10,000 before you even arrive at the hospital. Even if my client has health insurance, he or she can be financially devastated by the co-pays, deductibles and uncovered medical services required. Injury victims are also entitled to money for lost wages and pain and suffering. If there is not enough liability insurance to pay these claims, you can recover them from your own UIM coverage. The beauty of UIM coverage is that you can control how much you have. You can buy UIM on the vehicles in your own household and basically insure the other drivers on the road in case they injure you.
