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Kansas uninsured (“UM”) and underinsured motorist (“UIM”) coverage

    The Kansas Legislature has required two types of “protection” within the “uninsured motorist coverage” which must be provided in every policy of motor vehicle liability insurance.

    K.S.A. § 40-284 mandates that the “uninsured motorist coverage” of a motor vehicle liability policy is to include: (1) coverage for damages resulting from bodily injury caused by the fault of one who has no insurance (uninsured motorist protection), and (2) coverage for damages resulting from bodily injury caused by the fault of someone who has a policy of motor vehicle liability insurance, but with limits less than those of the injured party (underinsured motorist protection).

    The legislature included the underinsured motorist protection within the uninsured motorist statute so that prior case law on uninsured motorist coverage would also apply to underinsured motorist coverage.  Generally, the courts have followed that case law, except where the statute has specifically superseded those decisions.

The nature of uninsured motorist (“UM”)coverage in Kansas

    Uninsured motorist insurance is in the nature of a contract of indemnity, as opposed to liability insurance.  It does not protect the insured against liability, but rather it insures him against loss by a limited group of tortfeasors.  Hammerman v. Southwest Insurance Group, 1 Kan. App.2d 445, 448, 571 P.2d 1 (1977).  Uninsured motorist coverage has been described as more closely resembling “limited accident insurance.”  Forrester v. State Farm Mutual Automobile Ins. Co., 213 Kan. 442, 517 P.2d 173 (1973).

    Uninsured motorist coverage is not for the purpose of protecting an uninsured motorist.  It is first party insurance for the benefit of the insured.  The coverage is intended to put the insured in the same position as if the tortfeasor were properly insured.  Stewart v. Capps, 14 Kan. App.2d 356, 789 P.2d 563 (1990), affirmed 247 Kan. 549, 802 P.2d 1226 (1990).

    Uninsured motorist law is a unique mix of both contract and tort principles.  The courts have stated that it is “a hybrid case in that the rights and duties as between the insured and his uninsured motorist insurance carrier are determined by contract law, and the liability of the uninsured motorist insurance carrier is determined by the legal liability of the uninsured motorist under tort law.” Hammerman at 448.

The nature of underinsured motorist (“UIM”) coverage in Kansas  

    Underinsured motorist coverage is also first party insurance.  However, it protects the insured from a tortfeasor who is underinsured.  A tortfeasor is underinsured when his limits of liability coverage is less than the underinsured motorist limits of the insured.  State Farm Mutual Auto. Ins. Co. v. Cummings, 13 Kan. App.2d 630, 778 P.2d 370 (1989).  Underinsured motorist coverage under K.S.A. 40-284(b) is to fill the gap inherent in motor vehicle financial responsibility legislation and compulsory insurance legislation to compensate innocent persons damaged by others without sufficient insurance.  Jones v. Automobile Club Inter-Insurance Exchange, 26 Kan. App.2d 206, 981 P.2d 767 (1999).

    

Construing uninsured and underinsured motorist coverage

    This is where a good Kansas uninsured and underinsured attorney is critical - finding coverage based on the various facts in a case.  We have significant experience in fighting insurance companies who have denied coverage on Kansas insurance policies

The primary rule of construction is that uninsured and underinsured motorist coverage will be liberally construed to provide the intended protection.  The Courts have stated that since the uninsured motorist is remedial legislation, any policy, which includes uninsured motorist coverage must be liberally construed to provide the intended protection.  Stewart v. Capps, 14 Kan. App.2d 356, 789 P.2d 563 (1990).  Underinsured motorist coverage provided pursuant to K.S.A. 40-284 (b) should be liberally construed in light of the legislative intent to compensate innocent persons damaged by others without sufficient insurance. Jones v. Automobile Club Inter-Insurance Exchange, 26 Kan. App.2d 206, 981 P.2d 767 (1999).

    The provisions of the statute are mandatory and are to be considered a part of every automobile policy in this state.  Policy provisions which impose a lesser obligation than that required by the statute are unenforceable.  Van Hoozer v. Farmers Insurance Exchange, 219 Kan. 595, 549 P.2d 1354 (1976).  If the policy in any way conditions, limits, or dilutes the coverage mandated by the statute, the court will declare that provision to be null and void.  Clayton v. Alliance Mutual Casualty Co., 212 Kan. 640, 651, 512 P.2d 507 (1973).  Insurance policy provisions may condition, limit or dilute uninsured motorist coverage as long as such exclusions and limitations fall within the exclusions and limitations expressly allowed by statute.  Ball v. Midwestern Insurance Company, 250 Kan. 738, 829 P.2d 897 (1992).

    However, to the extent that the policy provision in question does not conflict with or attempt to diminish or omit statutorily mandated coverage, it will be controlling between the parties.  State Farm Mut. Auto Ins. Co. v. Cummings, 13 Kan. App.2d. 630, 778 P.2d 370 (1989).

    In summary, first the policy must be consulted.  An unambiguous provision will be enforced as written unless it conflicts with the mandatory provisions of the statute.  If the policy is silent on the particular issue, the statute will control.  If the statute authorizes an exclusion or limitation, it must be included in the policy for the company to take advantage of it.  The courts will apply the rule of liberal construction, and if the policy provision is ambiguous, the courts will construe the language against the insurance carrier.  

As an example of underinsured motorist coverage, if the insured carries liability policy limits of $100,000, the policy must include uninsured and underinsured motorist limits of $100,000, unless the insured rejects the higher limits and elects to carry lower limits of coverage.  Assuming the insured did not reject the higher limits, and assuming that he was injured by the driver of another vehicle who only carried the minimum liability limits of $25,000, the tortfeasor would be “underinsured” to the extent of $75,000 (the difference between the insured’s underinsurance motorist limit and the tortfeasor’s liability limit).

To recover underinsured motorist benefits in Kansas, a two-step process must be satisfied by the insured (in addition to proving that he is “legally entitled to recover” against the tortfeasor):

1.    The tortfeasor’s liability limits must be less than the insured’s underinsured motorist limits, and

2.    The insured must have damages in excess of the tortfeasor’s liability limits.

  

Minimum Limits in Kansas auto insurance policies

    The statute requires minimum limits of $25,000 per person and $50,000 per accident for both uninsured and underinsured motorist coverages.  The limits must also be equal to the liability limits of the policy, unless the insured rejects those higher limits in writing.