Kentucky Injury Lawyers Blog

Kentucky Supreme Court Ruling on Uninsured Motorist (UIM) Benefits

Wed, 25 Nov 2009 11:59:01 -0600

In the case of James Malone v. Kentucky Farm Bureau Mutual Insurance Company, the Kentucky Supreme Court affirmed the Opinion of the Court of Appeals, upholding the trial court's summary judgment.

The primary issue under consideration in this case was the requirement under KRS 304.39-320 and Coots v. Allstate Ins. Co. for an injured person or personal representative who "agrees to settle a claim with a liability insurer and its insured" to provide written notice of "the proposed settlement" by certified or registered mail to all uninsured motorist insurers that provide coverage.

After sustaining injuries from a car accident, James Malone filed suit against Timothy Bruce, the other driver involved in the collision, and against Kentucky Farm Bureau Mutual Insurance Company, Malone's underinsured motorist insurance (UIM) carrier. Prior to trail, Malone accepted the offer of Bruce's liability insurance carrier, Atlanta Casualty, for the limits of the policy in exchange for a release from further liability. Malone's counsel sent a certified letter to Farm Bureau stating, in part:

"Atlanta Casualty has advised that they have policy limits of $25,000.00 and this amount has been offered to settle their portion of Mr. Malone's claim. We are considering whether to accept this offer. In the meantime, because of the seriousness of Mr. Malone's injuries, we are making a claim for the policy limits of all applicable policies issued by Kentucky Farm Bureau for underinsured motorist coverage."

Farm Bureau filed a motion for summary judgment seeking a dismissal of Malone's UIM claim on the grounds that Malone's written notice stated only that he was "considering whether to accept this offer," which was not sufficient notice of an agreement to settle as required by KRS 304.39-320. They claimed that this lack of proper notice released Farm Bureau from responsibility for the UIM claim made by Malone. The McCracken Circuit Court agreed, and the summary judgment was affirmed by the Court of Appeals and Kentucky Supreme Court.

Kentucky's Underinsured Motorist Coverage Available despite Exclusive Remedy Rule in Worker's Compensation Case

Fri, 13 Mar 2009 09:11:19 -0600

On February 27, 2009 the Kentucky Court of Appeals issued a ruling that should be taken into consideration in any case that involves both workers' compensation and automobile negligence. The case, State Farm Mutual Automobile Insurance Company v. Carlene Susher, as Administratix of the Estate of Ronald Slusher, Deceased, concerns whether a person can have both a workers' compensation claim and a claim for underinsured or motorist benefits when the at-fault party is a co-worker.

In this case a coal truck driver, Donald Slusher, was killed when a co-worker's truck rolled into the building he was occupying. An investigation by the Mine Safety and Health Administration (MSHA) determined that the accident was caused because the coworker negligently failed to apply the parking break before exiting the truck. The victim's estate received worker's compensation benefits. The estate also claimed benefits under the UM (uninsured motorist) and/or UIM (underinsured motorist) coverage purchased by the victim on his own personal vehicle. One is generally entitled to benefits under a UM policy when the at-fault driver has no insurance and to UIM benefits if the at-fault driver has insufficient insurance.

State Farm moved to dismiss the case because the victim did not have an automobile negligence claim against the co-worker. The victim did not have a claim against the co-worker because, generally, if you are covered by workers' compensation insurance the only claim you can bring against your employer or a co-worker is under the workers' compensation system (See KRS 342.690). The co-workers truck was insured by Progressive and that policy did not apply because of this "exclusive remedy" rule.

The court first examined the language of the State Farm policy and found that the terms were ambiguous in that State Farm established coverage when one is "legally entitled to collect from the driver of an uninsured motor vehicle". The court held that the negligence of the co-worker was stipulated and the damages exceeded the workers' compensation recovery. Basically, the workers' compensation plan rendered the at-fault party underinsured. The Court also applied the "reasonable expectations" test and held that a person who purchases additional coverage has a reasonable expectation that he will be additionally compensated under his own insurance policy if the compensation from insurance sources is not adequate.

One of the most important reasons to secure legal counsel after an accident is to make sure that all available coverage is sought. As the Susher case illustrates, applicable coverage is not always obvious and you cannot count on the insurance company to provide the correct and final answer as to whether your policy applies.

Kentucky No-Fault Benefits Under Assault

Wed, 18 Feb 2009 09:53:20 -0600

Among bills being considered by the General Assembly this session is a proposal to drastically change Kentucky's no-fault insurance system. As it currently exists, no-fault auto insurance coverage, also called PIP (Personal Injury Protection) or BRB (Basic Reparation Benefits), pays for medical bills, wage loss and certain other expenses, immediately after an accident. It is referred to as "no-fault" because, generally speaking, you will get no-fault benefits from the car or truck in which you are a driver or passenger when an accident happens, regardless of who is at fault.

Even if you have a liability claim against an at-fault driver, no-fault coverage is important because, unlike liability coverage, it will pay your losses along the way, before the whole matter is settled. If you are missing work due to your injury the standard no-fault policy will pay up to $200 a week for wages. You have the right to designate whether you want to reserve your benefits to pay wage loss or have them applied to medical expenses.

Kentucky House Bill 381, sponsored by Representative Jim Gooch, provides for PIP to be directed to emergency services first. The injured person would not be able to direct benefits to wage loss. The bill also proposes a number of ways for insurance companies to avoid payment of medical bills. They would be able, without court order, to require an injured person to undergo a medical examination by a doctor chosen by them. The bill would also establish a complicated system for third party review to determine whether medical expenses are reasonable and necessary.

Nobody asks to be in a wreck. One of the hardest issues my clients face is the loss of income while recovering from an injury. While $200 a week is usually not enough to make up all that is lost, it can be the lifeline that keeps a family afloat until the case is settled or the victim is back to work. Rep. Gooch's bill would force a car accident victim to use his PIP benefits for medical care that might be covered by health insurance, while the victim likely has no coverage for wage loss. Under this plan a person who has paid two insurance premiums, one for his car and one for his health insurance, has simply lost up to $10,000 of benefits.

When the Kentucky General Assembly passed the no-fault laws in 1974 they said their purpose was to "encourage prompt medical treatment and rehabilitation of the motor vehicle accident victim...to permit more liberal wage loss and medical benefits...and to reduce the need to resort to bargaining and litigation through a system which can pay accident victims without the delay, expense, aggravation, inconvenience, inequities and uncertainties of the liability system." This bill undermines all those purposes.