In my last blog post, I discussed the dangers of not purchasing sufficient uninsured motorist coverage in the event that a person with no automobile insurance causes significant injury.

However, what happens when a person does have automobile insurance coverage- but not enough. As we discussed previously, Kentucky law requires all automobile owners to maintain at least $25,000.00 in automobile liability coverage.

So, what happens when an insured driver with minimum insurance coverage causes a significant wreck with significant injuries? Well, you could sue the driver personally. However, in 20+ years of practice, I have not encountered a person who had minimum automobile insurance coverage that was, at the same time, sitting on a pile of money. If the underinsured driver had significant money or other assets, they would have purchased adequate liability insurance coverage to protect those assets. Also, if you went to trial and obtained a big enough verdict, the at-fault driver could simply file for bankruptcy and you would receive nothing but the original minimum insurance coverage minus all the costs incurred in going to trial.

The Solution?

While Kentucky requires every automobile owner to carry uninsured motorist coverage, the law does not require us to maintain underinsured motorist coverage. Now, in all my years of practice, I have found that probably 75% of my clients carried underinsured motorist coverage. (And the ones that didn’t regretted it). However, like uninsured motorist coverage, if you carry the minimum limits of $25,000.00 you are only protected up to injuries valued at $50,000.00 or less. ($25,000.00 from the at-fault insurance+$25,000.00 from your own underinsured motorist coverage). With the costs of medical treatment and hospitalization rising so quickly, I find that even relatively minor injury claims can cost $25,000.00 to $50,000.00 in just medical expense. That does not even take into account a person’s lost wages, inconvenience, or pain and suffering.

Again, the answer is to not rely on others to have enough insurance coverage. You should prepare for the worst and hope for the best. That means purchasing higher limits of underinsured motorist coverage to protect you and your family even when the negligent motorist has technically complied with the law.

Underinsured motorist coverage can be purchased to cover $50,000, $100,000, $250,000, $500,000, or even a $1,000,000 umbrella policy.

As I indicated in my last blog post, I always advocate for the $1,000,000.00 umbrella policy. It is not as expensive as you think, and it covers everything. It provides $1,000,000 in liability coverage if you are at-fault, uninsured motorist coverage if the at-fault driver has no insurance and underinsured motorist coverage if the at-fault party has insurance but not enough. Further, if you own your own home, it provides the same $1,000,000 in liability coverage for your property.