Kentucky Injury Lawyers Blog

Many people have heard of "no-fault" insurance coverage, but find the term confusing. A car accident is almost always somebody's fault. In Kentucky "no-fault" is just a term for a type of auto insurance coverage, also called PIP (Personal Injury Protection) or BRB (Basic Reparation Benefits) that pays for medical bills, wage loss and certain other expenses, immediately after an accident.  Every car or truck insurance policy issued in Kentucky has to include no-fault coverage unless formal steps are taken to waive it, which rarely happens (no-fault is not required coverage for motorcycles).  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.  You can even get no-fault benefits in a single vehicle collision that is your own fault.

Of course, if you are hurt in an accident that is not your fault you can still have a claim against the person who caused the wreck (a liability claim). Standard no-fault benefits only cover the first $10,000 of your medical bills and wage loss.  If you have more than $10,000 in medical expenses or lost wages, those damages (losses) are part of your liability claim along with other damages not covered by PIP, such as pain and suffering, future medical expenses, and future impairment of your ability to work.

I always advise my clients that we don't want to present a liability claim for settlement until we know the full extent of their injury and can show all of the expenses and suffering that have been caused.   Whenever possible we wait until a client is at maximum medical improvement (MMI) before pushing for a settlement or presenting the case for trial.  This makes no-fault coverage all the more important because it provides some payments along the way, before the liability claim is resolved.

As you are seeking medical treatment, you can have medical bills submitted directly to your no-fault carrier.  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.  

While it is the general rule that no-fault coverage comes from the vehicle you are in when the accident happens, there are other policies that might provide this coverage to you if you are hit as a pedestrian or injured while in an uninsured car or truck. Do not assume that there are no benefits available until you have spoken with a lawyer.

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.  

Part II - What is Uninsured Motorist Coverage?

The Insurance Research Council (IRC) estimates that 16% of drivers in Kentucky were uninsured in 2007.  IRC Vice President David Corum projects that for every one percent increase in unemployment nationwide the percentage of uninsured motorists increases three quarters of a percentage point.  Sadly, unemployment rates are climbing.

If you are in an accident caused by an uninsured driver you may have trouble collecting compensation for your damages.  The at-fault driver is personally responsible for damages but often will not have the money to pay you even if you take the step of suing that driver and getting a judgment.  

Medical bills after an accident can be financially devastating, even for people with health insurance.  Injuries can keep you from working and cost you the ability to support your family.

You can protect yourself by having both collision and uninsured motorist coverage (UM).  Collision coverage pays your own property damage, usually regardless of how the damage occurs.  UM covers your bodily injury claim, which includes medical bills, lost wages, and pain and suffering.  UM applies when there is an impact with an uninsured at-fault driver.  (Unlike PIP and collision, UM does not apply when no other driver is at fault and it does not typically apply if another driver causes you to wreck without his vehicle making contact with your vehicle).  

In Kentucky UM must be offered as part of every policy covering a car or truck.   (UM does not have to be offered as part of policies covering motorcycles). You do not have to purchase it, but every company selling policies in Kentucky has to offer it.  In order to exclude it from your policy you must acknowledge in writing that you do not wish to buy it.  

You may save some money on your premium by declining UM, but consider where that will leave you if you are hit by one of the many uninsured drivers on the road today.

Part I - Protecting Yourself by Buying Good Insurance Coverage on Your Own Vehicle

With the current state of the economy, people everywhere are looking for ways to trim budgets. We can expect to find more people reducing what they spend on car insurance and, in some cases, driving with no insurance at all.  If you spend less on your car insurance you usually end up with less coverage - fewer benefits to pay your own car repairs, car rental, and medical bills, and fewer benefits to pay for any injury or damages you cause another person.   A driver without enough car insurance or with no car insurance will be personally responsible for uncovered damages, but collecting damages from an individual can be difficult or impossible. The guy with no car insurance usually has no money to pay you either.

Fortunately, in Kentucky, you can protect yourself by purchasing Underinsured Motorist Coverage (UM) and/or Uninsured Motorist Coverage (UIM). UM is coverage you buy on your own automobile policies that pays your bodily injury claim if you are in an accident caused by a driver with no insurance. UIM works similarly, but pays you if you are hit by a driver who is insured, but who does not have enough liability coverage to pay everything you deserve.   Kentucky requires a minimum of $25,000 in liability coverage on every policy, but your damages might include medical bills, lost wages, pain and suffering and future medical bills and wage loss in excess of $25,000. The value of the claim beyond the amount of coverage is the underinsured amount, and UIM coverage pays that up to the limits of the limits of the UIM policy.

UM and UIM coverage can come into play even if the car or truck that is covered by that insurance is not involved in the wreck. If, for example, you are hit when you are a pedestrian, you can still turn to the coverage on cars in your household for this kind of insurance coverage. If you are in a car that belongs to someone else you will turn first to the car you in for UM or UIM, but next in line will be the UM or UIM on any car owned by you or by a relative living in your household.

Given the state of the economy and the number of uninsured and underinsured drivers on the road, it is a good idea to meet with your insurance agent and review your policies.

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.