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Morrin Law Office


When most people hear the word “insurance” their eyes glaze over and their mind starts to wonder. I know. Once upon a time the word had a similar effect on me. I knew there were certain situations in which I needed to have insurance: 1) Car Insurance is legally required in the Commonwealth of Kentucky (See KRS 304.39-090, KRS 304.39-110, and KRS 304.39-117) but I didn’t know how much or what kind of insurance to “double down” on, 2) Home insurance isn’t required by law but it’s wise to have and almost all mortgage lenders require it, 3) Life insurance certainly isn’t required by law but it’s responsible to purchase life insurance to protect your loved ones after you’re gone, 4) Health insurance is almost required by law but such requirement is loosely enforced, although it’s certainly best to obtain health insurance, 5) Commercial insurance is required in some circumstances and higher insurance liability policies are required for commercial vehicles; at least $750,000.00 if the vehicle is a larger vehicle over 10,000 lbs, and 6) Other insurance (such as umbrella insurance) options also exist.

How do we make sense of it all? We’ve compiled the following tips for home, life, and auto insurance to help you navigate the insurance maze in Kentucky.

Car Insurance in Kentucky

The four most important insurance policies in auto insurance include a. Liability, b. Personal Injury Protection (PIP), c. Under-Insured Motorist coverage (UIM), and d. Uninsured Motorist coverage (UM).

Every Kentucky policy has $25,000 of liability coverage (that is your insurance is supposed to cover up to $25,000 of damage you cause to someone else if the wreck is your fault).

Every Kentucky policy has $10,000 worth of Personal Injury Protection (that is your insurance is supposed to cover up to $10,000 of your medical bills, and other certain expenses, caused by an accident regardless of who is at fault).

UIM and UM insurance coverage is optional in Kentucky. UIM is insurance available to you IF you chose to purchase it at the time you signed up for insurance AND if the at-fault driver’s liability insurance is insufficient to cover your medical bills, out-of-pocket expenses, future treatment, etc. UM insurance is available if the at-fault driver has no insurance OR if you are involved in a hit-and-run where the other driver is at fault but they flee the scene of the accident.

CAR INSURANCE PURCHASING TIP: The most important car insurance for you to purchase is additional Personal Injury Protection (PIP) insurance! This is insurance money that goes to you regardless of fault in a serious accident and additional PIP insurance can be stacked with other additional PIP insurance policies if necessary. Also, protect yourself by purchasing UIM and UM policies at least in the amount of your liability policy.

Kentucky is a “no-fault” state, which partially means that each driver’s insurance will pay for their first $10,000 in medical bills, and other certain expenses, and the at-fault driver’s insurance company will reimburse the other. For more information regarding no-fault coverage please review the Kentucky Department of Insurance article: No-Fault Coverage Uncovered.

Home Insurance in Kentucky

The most important aspect of home insurance is obtaining sufficient coverage in relation to the replacement value of your home and to identify likely claims that may need to be made in the next five to ten years to make sure your insurance will cover the exact kind of claim you are interested in. One way to be sure you have the coverage you need is to contact your insurance agent in writing (email is sufficient) to ask if certain claims will be covered.

You should speak with three different home owner insurance agents before making a final decision. You should know the different kinds of home owner insurance as well as the terminology so you can make an informed decision.

Some common home insurance policy types follow:

  • HO-2 – Broad policy that protects against 16 perils that are named in the policy.
  • HO-3 – Broader policy that protects against all perils except those specifically excluded by the policy.
  • HO-5 – Premium policy that typically protects newer, well-maintained homes; it covers against all perils except those specifically excluded by the policy.
  • HO-6 – Insurance for co-ops/condominiums, which includes personal property coverage, liability coverage and coverage of improvements to the owner’s unit. Insurance for the actual structure usually comes through the association.
  • HO-7 – Similar to an HO-3 policy, but for mobile homes.
  • HO-8 – Policy specifically for older homes, with similar coverage to an HO-2 policy. However, it only covers actual cash value.

In order to make the best decision you need to be able to speak the lingo. The following basic home owner insurance terms will shed some light on the process and educate you regarding insurance terminology:

Deductible – This refers to the amount you must pay out of pocket before your insurance kicks in; the higher the deductible, the lower the annual premium.

Liability Coverage – This is coverage that will pay medical or legal bills if someone is hurt on your property, usually due to negligence.

Personal Property – Sometimes called the contents of your home, this is tangible property such as furniture, electronics, clothing, and “stuff” that isn’t considered your real estate.

Premium – This is the price you pay for insurance, usually annually or monthly.

Replacement Cost – This is the kind of insurance that pays the full cost of replacing your dwelling or personal property, up to a maximum dollar amount. Most standard policies offer replacement cost, but you want to be sure the maximum amount is high enough.

Actual Cash Value – This type of policy gives you the current cash value (with depreciation) for personal property or your dwelling. It’s possible to have actual cash value dwelling coverage (as with an HO-8 policy), but to get replacement cost coverage for your contents.

Sub-Limits – Homeowners insurance policies will include limits, but they’ll typically also have sub-limits. For instance, the sub-limit on personal property for a $500,000 policy would typically be $250,000, or 50 percent of dwelling coverage.

Riders – These are policies you can include on your overall insurance policy to cover specific items. For instance, expensive antiques, jewelry and artworks are often covered under their own rider because they’re too valuable to be covered as regular personal property. Some HO-8 policyholders also may get additional riders for things like heating, ventilation and air-conditioning systems, which are part of the home and expensive to replace.

The Kentucky Department of Insurance has published factual information regarding Homeowner and Renter Insurance that you may wish to review before making a purchasing decision.

TIP: If you ever have a claim denied by your insurance company then I recommend having a professional insurance attorney in Richmond, KY review the denial and the basis thereof.

Life Insurance in Kentucky

Life insurance can save your family’s quality of life when you are no longer alive to do so yourself. Unfortunately, many life insurance companies attempt to find a way to nullify the contract or to deny reasonable claims simply because they do not want to pay. We have recovered hundreds of thousands for clients who have been denied outright by insurance companies. They deny claims as a matter of course, sometimes regardless of the reasonableness of the claim.

Similar to purchasing other insurance, it’s always a good idea to speak with at least three insurance agents from three different companies. You should consider asking each agent about the following steps that we recommend you take (always get a medical exam if you are in good health):

  • Get a medical exam before you apply for a policy if you are in good health;
  • Always ask your agent for a screenshot of the quote;
  • Save big money by layering;
  • Opt for an annuity payout instead of a lump sum; and
  • Don’t volunteer unnecessary information.

Can’t get car or homeowner insurance?

If you have been denied car insurance due to accidents or other issues then you may be eligible to purchase insurance through the Kentucky Automobile Insurance Plan (KAIP). If you have been denied Homeowner Insurance coverage then you may be eligible to obtain insurance through the Fair Access to Insurance Requirements (FAIR) Plan. The Kentucky Department of Insurance has published information and qualifications for the KAIP and FAIR plans for those who are otherwise unable to purchase such insurance.

Insurance claim denied?

Kentucky has adopted what is known as the “Reasonable Expectations Doctrine,” which indicates that if you had a reasonable expectations of insurance coverage when you purchased the insurance then the insurance company must pay your claim even if your policy contains exclusions that would prohibit your claim otherwise. In other words, if they sell you car insurance and then try to exclude you from making any and all car insurance claims; Kentucky law will require them to pay your car insurance claim despite those attempts.

This is why it is very important that once you have had a claim denied, you absolutely must have that denial reviewed by an attorney who is distinguished in Kentucky Insurance Law.

The “Reasonable Expectations Doctrine” is more thoroughly explained in the 2003 Kentucky Supreme Court opinion of True v. Raines.

Understanding the Kentucky Unfair Claims Settlement Practices Act

Whenever dramatic weather and storms rips through the Kentucky countryside, the result is often major insurance claims. And thanks to our Unfair Claims Settlement Practices Act (UCSPA) (KRS 304.12-230), the Bluegrass State provides supports for those claims made in good faith.

This act provides guidance on what constitutes unfair claims settlement, which helps protect the policyholders when they need payments and support the most: in true emergencies.

The following situations are considered by the act to be unfair and unlawful:

  1. Failing to implement fair and prompt claim investigation standards for insurance policy claims;
  2. Denying claims outright without reasonable investigation;
  3. Misrepresenting relevant facts and provisions related to the claims;
  4. Failing to affirm or deny coverage of claims within a reasonable timeline after proof of loss statements are completed;
  5. Failing to acknowledge or respond promptly to insurance policy claims;
  6. Failing to carry out prompt, fair, and equitable settlements where liability has been made clear;
  7. Compelling those insured to institute litigation to recover payments due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds;
  8. Attempting to settle a claim for less than the amount to which a reasonable person would have believed they were entitled by reference to written or printed advertising material accompanying or made part of an application;
  9. Delaying the investigation or payment of claims by requiring an insured, claimant, or the physician of either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss forms, both of which contain essentially the same information;
  10. Attempting to settle claims based on an altered application without notice to, or knowledge, or consent of the insured;
  11. Making claims payments to insureds or beneficiaries without an accompanying statement explaining the coverage for which the payments are being made;
  12. Making known to those insureds or included claimants a policy of appealing from arbitration awards in favor of insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the amount awarded in arbitration;
  13. Failing to promptly provide a reasonable explanation based on the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement;
  14. Failing to promptly settle claims, where liability has become reasonably clear, under one portion of the insurance policy coverage in order to influence settlements under other portions of the insurance policy coverage;
  15. Failing to comply with the decision of an independent review entity to provide coverage for a covered person as a result of an external review
  16. Knowing and willfully failing to comply with the provisions of KRS 304.17A-714 when collecting claim overpayments from providers; or
  17. Knowing and willfully failing to comply with the provisions of KRS 304.17A-708 on resolution of payment errors and retroactive denial of claims.

Insurance companies are obligated to act in good faith with those directly insured and third-party claimants when contractually required to pay a claim. This act is meant to protect the public from unfair trade practices and fraud.

Some other potential property claims issues worth considering include:

  • Insurers and agents shall not misrepresent or conceal from first party claimants any pertinent benefits, coverage, or other provisions of any insurance policy.
  • Every insurer, upon receiving notification of a claim, shall within 15 days acknowledge the receipt of the notice unless payment is made within that period of time.
  • An insurer shall affirm or deny any liability on claims within a reasonable time and offer payment due within 30 calendar days of receipt of due proof of loss.
  • If the insurer needs additional time to investigate and decide whether a claim should be accepted or denied, it shall so notify the first party claimant within 30 calendar days after receipt of the proof of loss, with the reasons additional time is needed. This will continue every additional 45 calendar days that the investigation continues until resolved either way.

Insurance plans are a necessary safeguard to protect yourself, your loved ones, and your assets in case of an emergency you hope never comes your way. They are purchased in good faith, and therefore you have every right to expect (and demand) the company offering that insurance will uphold their end of the agreement and provide that crucial support when the situation calls for it. And if it isn’t, Morrin Law Office is here to help you navigate unfair and dishonest practices when they arise.