What types of auto insurance should you buy?

On Behalf of | Feb 4, 2021 | Car Accidents, Injuries

In the 1970s, no-fault auto insurance laws were all the rage. Advocates claimed these laws excluded ambulance-chasing lawyers from the process and thus reduced costs. Instead, these laws triggered a rush of fraudulent claims, especially the swoop and squat insurance fraud scam. As a result, only about a dozen states still have no-fault laws.

Kentucky is one of these states. PIP and collision coverage usually applies, regardless of fault, unless the crash triggered more than $1,000 in medical bills. Most doctors charge almost that much to walk into the examination room. So, the no-fault law in the Bluegrass State has only limited applicability.

If you were in a serious injury wreck, a Lexington personal injury attorney can obtain compensation for economic losses, such as medical bills and property damage, and noneconomic losses, such as pain and suffering.

However, there are hundreds of fender-bender accidents in Kentucky every day. These wrecks are usually insurance-only matters. Regardless of who was at fault, the insurance company usually covers property damage and medical bills, up to the policy limits. Unfortunately, many people are confused about what types of coverage they have and how to file claims. 

Liability and Property Damage

Kentucky has a mandatory auto insurance law, and all insurance policies include liability protection. Lienholders usually require owners to carry liability and collision or property damage insurance. Liability coverage applies if you were at fault. Collision coverage applies if either driver was at fault. After the lien is paid off, you typically have the option of liability-only insurance.

That’s not always a good idea. Even if you only brush against a fixed object, like a mailbox, or a moving vehicle, the repair bill could be several thousand dollars.

Kentucky requires motorists to carry a minimum of $10,000 in property damage coverage. Back in ye olden days, that amount was more than enough. Today, many new and used cars cost substantially more than $10,000. So, if you total one in an accident, you could be financially responsible for any property damage which exceeds $10,000.

On a related note, there is often a difference between fault for a crash and legal responsibility for a crash. A number of defenses, such as contributory negligence and last clear chance, could come into play. But for insurance purposes, fault is the only thing that matters. Typically, adjusters assign fault based on the contents of the police accident report.

PIP (Personal Injury Protection)

Since Kentucky is a no-fault state, drivers must carry at least $10,000 in PIP insurance. Up to $50,000 is available.

PIP covers losses for both policyholders and non-policyholders regardless of fault. If you have State Farm and you are in an accident, State Farm will pay the following expenses for you and anyone else who was injured in your vehicle:

  • Medical Expenses: This category includes direct expenses, like emergency care, and ancillary costs, like transportation expenses. In a fender-bender, $10,000 is normally enough to pay most or all of these bills.
  • Lost Wages: Not all PIP policies have wage replacement benefits. Even if they do, there is usually not much wage replacement money available, especially if you only have the minimum.
  • Funeral Expenses: This PIP coverage is hardly ever an issue. If the wreck killed someone, it was, by definition, a serious injury wreck in Kentucky.
  • Substitute Services: Injured individuals, even if their injuries were not terribly serious, often need help with things like household chores and child care. Some PIP policies cover these expenses.

In a serious injury wreck, the medical bills often exceed $100,000. Therefore, drivers should consider buying as much PIP coverage as they can comfortably afford.

UM/UIM (Uninsured and Underinsured Motorist Coverage)

Kentucky has one of the highest percentages of uninsured motorists in the country. Additionally, as mentioned, many Kentucky drivers are dangerously underinsured. UM/UIM coverage often pays for economic losses if the other driver was at fault and the other driver did not have sufficient coverage to address your economic losses.

UM/UIM coverage also comes into play in hit-and-run claims. In serious injury claims, attorneys can usually track down the tortfeasor (negligent driver). So, an attorney can force the other insurance company to compensate you for both economic and noneconomic losses.

But many hit-and-run claims do not fall into the aforementioned serious injury category. Parking lot hit-and-runs are a good example. Unless you have UM/UIM coverage, which is optional in Kentucky, you must pay damages out of your own pocket.

Most people park in public areas almost every day. As a result, a parking lot door ding or other annoying incident is almost inevitable. So, you should probably consider buying at least some UM/UIM coverage that will at least pay part of the repair cost.

Kentucky has some of the most complex auto insurance requirements in the country. For a free consultation with an experienced personal injury lawyer in Lexington, contact the Goode Law Office, PLLC. You have a limited amount of time to act. #goodelawyers