In 2009 the Kentucky Supreme Court substantially revised the Kentucky Rules of Professional Conduct.
Articles in this index written before 2009 citing Kentucky Rules of Professional Conduct must be checked for any changes to the rule cited.

Underinsured Motorist - Avoid this Underinsured Motorist Malpractice Trap


Your client is badly hurt by a careless driver. You file suit. Careless driver’s insurer certifies his liability limits are $25,000 and makes an offer of that amount. You check and learn that your client has underinsured motorist coverage of $100,000. The injuries are sufficient to justify the entire amount.

Happy days. Few situations are more pleasing than a payday in hand with more to come. Beware, however, of the statutory hurdle you must clear before accepting the first part of the settlement. Before accepting settlement the injured party or injured party’s representative must give notice of the proposed settlement to the underinsured motorist carrier. K.R.S. 304.39-320 requires written notice sent by registered or certified mail. The underinsured motorist carrier then has 30 days either to substitute payment, preserving its subrogation rights against careless driver, or to allow you to release careless driver and accept the proposed settlement.

Only by complying with this statute do you preserve your client’s right to proceed against the underinsured carrier. If you do not do so, the underinsured motorist carrier likely will take the position that it has no duty to pay your client. Careless driver has received a full release and has no legal duty to respond further in damages.

K.R.S. 304.39-320 codifies the procedure first established in Coots v. Allstate Insurance Company, Ky., 853 S.W. 2d 895 (1993). Although it is irritating to give notice and wait 30 days, you may cost your clients all of their underinsured benefits by not carefully following this statute. Your clients will then look to you.


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Disclaimer: The contents of this Web site are intended for general information purposes only and should not be construed as legal advice or legal opinion on any specific facts or circumstances. It is not the intent of this Web site to establish an attorney’s standard of due care for a particular situation. Rather, it is our intent to advise our policyholders to act in a manner which may be well above the standard of due care in order to avoid claims having merit, as well as those without merit. In the event any statement on the Web site differs from a statement in an issued policy the policy will control.