There is a newer version of the Kentucky Revised Statutes
2009 Kentucky Revised Statutes
Subtitle 39. Motor Vehicle Reparations Act
304.39.320 Underinsured motorist coverage -- Effect of settlement of claims.
Download pdfthat party for damages on account of injury due to a motor vehicle accident. (2) Every insurer shall make available upon request to its insureds underinsured motorist coverage, whereby subject to the terms and conditions of such coverage
not inconsistent with this section the insurance company agrees to pay its own
insured for such uncompensated damages as he may recover on account of injury
due to a motor vehicle accident because the judgment recovered against the owner
of the other vehicle exceeds the liability policy limits thereon, to the extent of the
underinsurance policy limits on the vehicle of the party recovering. (3) If an injured person or, in the case of death, the personal representative agrees to settle a claim with a liability insurer and its insured, and the settlement would not
fully satisfy the claim for personal injuries or wrongful death so as to create an
underinsured motorist claim, then written notice of the proposed settlement must be
submitted by certified or registered mail to all underinsured motorist insurers that
provide coverage. The underinsured motorist insurer then has a period of thirty (30)
days to consent to the settlement or retention of subrogation rights. An injured
person, or in the case of death, the personal representative, may agree to settle a
claim with a liability insurer and its insured for less than the underinsured motorist's
full liability policy limits. If an underinsured motorist insurer consents to settlement
or fails to respond as required by subsection (4) of this section to the settlement
request within the thirty (30) day period, the injured party may proceed to execute a
full release in favor of the underinsured motorist's liability insurer and its insured
and finalize the proposed settlement without prejudice to any underinsured motorist
claim. (4) If an underinsured motorist insurer chooses to preserve its subrogation rights by refusing to consent to settle, the underinsured motorist insurer must, within thirty
(30) days after receipt of the notice of the proposed settlement, pay to the injured
party the amount of the written offer from the underinsured motorist's liability
insurer. Thereafter, upon final resolution of the underinsured motorist claim, the
underinsured motorist insurer is entitled to seek subrogation against the liability
insurer to the extent of its limits of liability insurance, and the underinsured
motorist for the amounts paid to the injured party. (5) The underinsured motorist insurer is entitled to a credit against total damages in the amount of the limits of the underinsured motorist's liability policies in all cases to
which this section applies, even if the settlement with the underinsured motorist
under subsection (3) of this section or the payment by the underinsured motorist
insurer under subsection (4) of this section is for less than the underinsured
motorist's full liability policy limits. The term "total damages" as used in this
section means the full amount of damages determined to have been sustained by the
injured party, regardless of the amount of underinsured motorist coverage. Nothing
in this section, including any payment or credit under this subsection, reduces or affects the total amount of underinsured motorist coverage available to the injured
party. Effective: July 15, 1998
History: Amended 1998 Ky. Acts ch. 564, sec. 1, effective July 15, 1998. -- Amended 1990 Ky. Acts ch. 103, sec. 2, effective December 1, 1990. -- Amended 1988 Ky.
Acts ch. 180, sec. 1, effective July 15, 1988. -- Created 1974 Ky. Acts ch. 385,
sec. 32, effective July 1, 1975.
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