{"data":{"id":"us-ky/krs-304.39-320","jurisdiction":"us-ky","citation":"KRS 304.39-320","heading":"Underinsured motorist coverage -- Effect of settlement of claims.","body":"(1) As used in this section, \"underinsured motorist\" means a party with motor vehicle\nliability insurance coverage in an amount less than a judgment recovered against\nthat party for damages on account of injury due to a motor vehicle accident.\n(2) Every insurer shall make available, upon request, to its insureds underinsured\nmotorist coverage, whereby, subject to the terms and conditions of the coverage not\ninconsistent with this section, the insurance company agrees to pay its own insured\nfor such uncompensated damages as he or she may recover on account of injury due\nto a motor vehicle accident because the judgment recovered against the owner of\nthe other vehicle exceeds the lia bility policy limits thereon, to the extent of the\nunderinsurance policy limits on the vehicle of the party recovering.\n(3) (a) If an injured person or, in the case of death, the personal representative, agrees\nto settle a claim with a liability insurer an d its insured, and the settlement\nwould not fully satisfy the claim for personal injuries or wrongful death so as\nto create an underinsured motorist claim, then written notice of the proposed\nsettlement shall be submitted by certified or registered mail to  all\nunderinsured motorist insurers that provide coverage.\n(b) The underinsured motorist insurer then has a period of thirty (30) days to\nconsent to the settlement or retention of subrogation rights.\n(c) An injured person, or in the case of death, the pers onal representative, may\nagree to settle a claim with a liability insurer and its insured for less than the\nunderinsured motorist's full liability policy limits.\n(d) If an underinsured motorist insurer consents to settlement or fails to respond\nas required by subsection (4) of this section to the settlement request within\nthe thirty (30) day period, the injured party may proceed to:\n1. Execute a full release in favor of the underinsured motorist's liability\ninsurer and its insured; and\n2. Finalize the proposed settlement without prejudice to any underinsured\nmotorist claim.\n(4) If an underinsured motorist insurer chooses to preserve its subrogation rights by\nrefusing to consent to settle, the underinsured motorist insurer shall, within thir ty\n(30) days after receipt of the notice of the proposed settlement, pay to the injured\nparty the amount of the written offer from the underinsured motorist's liability\ninsurer. Thereafter, upon final resolution of the underinsured motorist claim, the\nunderinsured motorist insurer is entitled to seek subrogation against:\n(a) The liability insurer to the extent of its limits of liability insurance; and\n(b) The underinsured motorist for the amounts paid to the injured party.\n(5) (a) Except as provided in para graph (b) of this subsection, the underinsured\nmotorist insurer is entitled to a credit against total damages caused by or as a\nresult of a motor vehicle accident in the amount of the limits of the\nunderinsured motorist's liability policies in all cases to  which this section\napplies, even if the settlement with the underinsured motorist under\nsubsection (3) of this section or the payment by the underinsured motorist\ninsurer under subsection (4) of this section is for less than the underinsured\nmotorist's full liability policy limits.\n(b) If the full liability limits of the underinsured motorist's liability coverage are\npaid to multiple injured persons, including, in the case of death, the personal\nrepresentative, pursuant to a reasonable settlement with the injured persons\nthat is based on a pro rata distribution of the underinsured motorist's liability\ncoverage in proportion to the injured persons' total damages, the credit to\nwhich the underinsured motorist insurer is entitled under paragraph (a) of this\nsubsection shall be limited to the amount paid to the injured party.\n(c) This subsection shall not be construed to prohibit an underinsured motorist\ninsurer from seeking to apply or enforce other credits or offsets against total\ndamages which are:\n1. Expressly included in the terms and conditions of the underinsured\nmotorist coverage, subject to Kentucky law; or\n2. Otherwise authorized under Kentucky law.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=54466","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:57Z","sha256":"e9d704d2182ef03d2ae3494d5b7d68dfdc4a4a8a843428f50dda2fcad6ab9fd0","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.39-310","next":"us-ky/krs-304.39-330"},"notice":"GroundRules: Original legal text. Not legal advice."}