First let’s define some of the basic policies Kentucky auto owners must purchase and may purchase:
WHAT IS LIABILITY CAR INSURANCE?
If you own a vehicle you intend to drive on public roads in Kentucky, then you are required to purchase liability car insurance. When you purchase liability car insurance, it will pay to treat injuries and repair property damage you cause to others in a car accident.
The purpose of liability car insurance is to protect your assets, such as your home, vehicles, and bank accounts from being subject to collections from a lawsuit to recover damage you cause to others. Although liability policies can vary, the two main types of liability car insurance are:
-Bodily Injury Liability: This policy pays for medical expenses and lost wages for other drivers, passengers, bystanders, or pedestrians injured in a car wreck cause by the policy purchaser.
-Property Damage Liability: This policy pays to repair or replace vehicles and valuables the policy purchaser damages in a car accident.
HOW MUCH LIABILITY CAR INSURANCE SHOULD I BUY?
How much car insurance you should purchase will depend on the value of the assets you own and are trying to protect from a lawsuit. The greater the value of your property and bank accounts then the more liability insurance you should purchase.
For example, if you are forced to file a lawsuit against someone else in court because their insurance company isn’t paying what they should on your claim or to preserve your claim because the statute of limitations is close to running while you’ve been treating for your injuries.
If you are successful and the jury awards you $100,000 for your medical bills, pain and suffering, lost wages, loss of earning capacity, future medical expenses, and the increased likelihood of future medical complications, but the other driver only purchased $25,000 in liability insurance then that is all their insurance will pay on the judgment awarded by the jury.
You will either need to attempt to collect the remaining $75,000 from the assets of the driver who caused the accident, or, if you had the foresight to purchase Under-Insured Motorist (UIM) coverage, then you should be able to collect against such a policy as that is why you should purchase UIM.
Kentucky law allows for exceptions of certain amounts of property that may be owned and not subject to collection from a lawsuit. This means that most people are what some call “judgment proof” because they do not own enough property for a lawsuit against them to make sense.
A common policy of a well-insured individual or business may look like 100/300/100 which translates to:
-$100,000 for injuries per person
-$300,000 for total injuries per accident
-$100,000 for property damage per accident
WHAT IS NO-FAULT COVERAGE?
A no-fault policy (also known as a “PIP” policy or “Basic Reparations” policy) is a required policy in Kentucky for at least $10,000 for medical bills, lost wages, out of pocket expenses made necessary by the car accident, medical liens, etc.
It’s a very good idea to purchase additional PIP coverage because these are funds that go directly to your benefit if you’re involved in a car accident regardless of who is at fault.
WHAT ARE UNDERINSURED MOTORIST (UIM) AND UNINSURED MOTORIST (UM) COVERAGE?
In Kentucky, drivers are only required to purchase liability insurance in the amount of $25,000. Two common optional polices are Under-Insured Motorist (UIM) coverage and Uninsured Motorist (UM) coverage.
If you are unfortunate enough to have been badly injured in a car accident, maybe you need surgery, suffered a brain injury, broken bones, etc., then the other driver’s minimum liability insurance policy will likely not be enough to cover your necessary medical treatment, lost wages, inconvenience, pain and suffering, increased likelihood of future medical complications, etc.
If you’ve purchased Under-Insured Motorist (UIM) coverage then you can make a claim for your damages that exceed the liability policy coverage amount. It is possible to stack multiple UIM policies, if you purchase them separately for each car you own, which I recommend, rather than purchasing one policy for all vehicles.
Uninsured Motorist (UM) coverage serves a similar purpose, but only kicks in when the other driver that hit you has violated the law by not purchasing insurance for their vehicle.
In this situation, you will be able to file a claim with your own insurance company under your UM policy.
While both of these policies are optional, they are very important to purchase for protecting your own health in case of an unfortunate devastating car accident.
WHAT IS UMBRELLA COVERAGE?
Umbrella coverage is like a safety-net of insurance protection so your assets are not subject to a lawsuit. Usually only after all other applicable policies are exhausted, then an umbrella policy would kick in. It only makes sense to purchase an umbrella policy if you have significant assets.
WHAT IS “FULL” COVERAGE?
Full Coverage can be defined differently in each insurance policy, and differently between insurance companies, but it generally means a liability policy, collision policy, comprehensive policy, and a medical payments policy.
A collision policy will pay to repair your car after a wreck or if your car has been totaled then this policy pays your vehicle’s estimated value.
A comprehensive auto insurance policy will pay for theft and damage caused by vandalism or acts of nature, like a tree branch falling on your car or truck, and other kinds of events as defined in the insurance policy.
MEDICAL PAYMENTS POLICY
A medical payments policy will pay for you and your passengers’ medical treatment beyond the no-fault coverage.
While Kentucky law only requires auto owners to purchase $25,000 worth of liability auto insurance, it’s better to purchase at least $50,000 in liability insurance because most insurance companies will only let you purchase an amount equal to or less of your liability insurance for policies that directly benefit you (such as PIP, UM, and UIM).
Purchase added PIP benefits because that money is spent on your benefit if you are in a car accident and it may be “stacked.” This means if you own two cars and purchase added PIP benefits for one of them but not the other, if the car that has less PIP is in a wreck, the driver will still be able to use the added PIP from the other car they own.
It’s wise to purchase UIM benefits since it is likely the other driver of an accident has a “minimum policy” of $25,000.00 in liability. This means if you are hurt and require surgery then the other driver’s policy is not going to cover everything. This is when UIM benefits may be claimed if you have purchased them.
The easiest way to shop insurance companies is to get a copy of your “dec page,” which is short for “Declarations Page.” This will allow you to know what policies you have in place and to easily let other insurance companies know what kind of car insurance you have so they can create a comparable coverage plan and undercut your current carrier on price.
Insurance premium rates can be determined by different factors between insurance companies, but most will at least take into account a person’s age, gender, where they live, marital status, make and model of their car or truck, their driving record, their credit history, the primary purpose of use of the vehicle, likely permissible drivers of their vehicle, and their annual mileage.
If you have been hurt in a car accident then call us now to make sure you have the finances and medical care to get back to your best life. Check out our client reviews on Google or watch our video to hear directly from some previous clients!