Insurer Only had an Obligation to Remind Insured of UIM Coverage at First Renewal

Allstate Insurance Co. v. Smith (Ky., May 5, 2016)

The policyholder was in an auto accident and received the tortfeasor’s $25,000 limit. The insurer denied the policyholder’s underinsured motorist (UIM) claim because he had never purchased UIM coverage. The Kentucky Supreme Court stated that insurers must only make UIM coverage available on request and that if a policyholder does not ask for UIM coverage, the insurer is not required to offer it. The court also held that a recent statute required insurers to notify their policyholders of UIM coverage when providing notice of the policy’s renewal. The court held that UIM coverage must be mentioned by the insurer only in the first renewal notice sent by an insurer to its insured.