Kentucky Court of Appeals rules on Underinsured Motorists case
by Mandy Hicks
Earlier this year, the Kentucky Court of Appeals made a significant ruling that’s largely viewed as favorable to plaintiff’s attorneys. The court ruled that the statute of limitations begins on an Underinsured Motorists claim when the insurance company turns down the insurance claim, rather than from the date of the accident or the date of the last Personal Injury Payment (PIP) was made.
Underinsured Motorists provisions are included in most insurance policies. The provisions allow motorists to cover the costs of property damage, physical injuries, rehabilitation and other issues caused by another driver who is underinsured or does not have enough insurance to compensate someone for their injuries and damages. Those involved in such an accident file a claim with their own insurance company seeking compensation. The provisions vary by company and by policy, and some accident victims seek the assistance of an attorney to file such a claim.
The recent Kentucky Court of Appeals case cited here was Amberee N. Hensley v. State Farm Mutual Automobile Insurance Co.
The case originated from an August 7, 2009, car accident. Amberee N. Hensley was involved in a motor vehicle accident with Awet Beyene. Beyene caused the accident. Beyene’s insurance policy with Nationwide Insurance provided up to $50,000 in liability coverage. Hensley’s vehicle was owned by Louisville Metro Government and did not have any Underinsured Motorists Coverage on it. However, Hensley had UIM coverage through two insurance policies she maintained with State Farm.
For its part, Nationwide accepted liability in February 2010 and awarded Hensley the full amount of coverage available in the policy, $50,000. Hensley then turned to her own insurer, State Farm, asking for benefits under its Underinsured Motorists policy. She made a formal request on Nov. 4, 2011. State Farm denied her claim. On January 24, 2012, Hensley filed a breach of contract action against State Farm. State Farm moved for summary judgment in the case, arguing that the complaint was time-barred. Her policy stated that she had two years to file a claim, barring other complications. Thus, her claim would have to have been filed by August 7, 2011.
Hensley argued that the breach of contract hadn’t occurred on August 7, 2011, so she could not have filed her claim against State Farm at that time.
The court agreed with Hensley. In its examination of the facts of the case and how other courts have handled similar cases, the Kentucky Court of Appeals said that the breach of contract claims generally use the date of denial of the claim as the start of the clock on setting the statute of limitations in a case. In its ruling, the court said: “It makes logical sense to run the statute of limitations for a tort-based claim from the date of injury. This is the date that the insured has an actionable claim. The same cannot be said for a UIM claim. The date of the accident may set the chain of events in motion, but it is not the defining event. The defining event is the date the UIM carrier denies the insured’s claim for benefits.”
If you have been injured in a car accident, seek the assistance of an attorney before you sign any documents or accept any settlement. You can reach us at (270) 781-6500 or through our web site contact form here.
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