Why Your Insurance Probably Won't Cover You | Underinsured Motorist Coverage Explained with Kellie Collins

You get hit by someone who runs a red light. You're seriously injured. Hospital bills pile up. Your life is upended.

Then you find out the person who hit you only carries state minimum insurance — $25,000. And your medical bills are already over $100,000.

That's when you realize: your own insurance probably won't cover you either. Because most people don't have underinsured motorist coverage.

In Episode 3 of It's Not Fair, Justin Peterson sits down with Kellie Collins — Managing Partner at Peterson Law — to talk about the coverage most people don't have, don't understand, and desperately need.

TOPICS COVERED:

• What underinsured and uninsured motorist coverage actually is (and why you need it)
• Why state minimum insurance limits ($25,000) aren't enough to cover serious injuries
• The shocking percentage of drivers on the road with little to no insurance
• Real case examples: What happens when someone doesn't have UM/UIM coverage
• How much coverage you actually need (and how to figure it out)
• How to check your own insurance policy — and what to look for
• What UM/UIM coverage actually costs per month (spoiler: less than you think)
• Stacking vs. non-stacking coverage explained
• How UM/UIM claims actually work
• Why your own insurance company fights you on these claims
• When you need an attorney for a UM/UIM claim
• Why insurance companies make lowball offers

THE BOTTOM LINE:

One in four drivers has no insurance at all. Most of the rest carry only $25,000 in coverage — which doesn't even cover a week in the ICU.

If you get seriously injured by someone else, your only real protection is the coverage you bought to protect yourself from their irresponsibility.

This episode is a wake-up call. After listening, you'll understand exactly what your policy covers (or doesn't cover) — and what to do about it.

ABOUT THE GUESTS:

Justin Peterson is the Founding Partner of Peterson Law Office. He focuses on catastrophic injury, medical malpractice, and wrongful death cases. When he's not fighting hospitals and insurance companies, he's hosting It's Not Fair.

Kellie Collins is Managing Partner at Peterson Law. With 8 years of experience defending insurance companies before switching to the plaintiff side, she understands exactly how insurance companies operate — and how to fight back.

ABOUT IT'S NOT FAIR:

It's Not Fair is a podcast about catastrophic injury and insurance cases — and why the system is designed to protect institutions over people. Hosted by trial attorneys Justin Peterson and Masten Childers lll, each episode exposes the moments that determine outcomes before most people know the game's started.

New episodes drop monthly.

It's Not Fair is a podcast about the moments that determine outcomes before most people realize the game has started. Hosted by Justin Peterson and Masten Childers. New episodes monthly.

Transcript

SPEAKER_00 0:00

You get hit by someone who runs a red light, you're seriously injured, hospital bills pile up, you can't work, your life is up-ended. Then you find out the person who hit you only carries state minimum coverage of $25,000. And your medical bills are over $100,000. That's when you realize your own insurance probably won't cover you either. Because most people don't have underinsured or uninsured motorist coverage. I'm Justin Peterson. I brought Kelly Collins, managing partner at Peterson Law, to talk about the coverage most people don't have, don't understand, but desperately need. This is It's Not Fair, Episode 3. Okay, all right, Kelly, let's start with the basics. What is underinsured motorist coverage and why do people need it?

SPEAKER_01 1:02

Underinsured motorist coverage is coverage that you purchase yourself on your insurance policy. And it makes up the difference if you're in an automobile accident and someone has less coverage than, say, your medical bills or your damages. Your underinsured motorist coverage can step in and make up that difference.

SPEAKER_00 1:19

Yeah. And so is this something that we we meet with and talk to people about all the time?

SPEAKER_01 1:25

All the time. It's so sad to see people come in and they have hundreds of thousands of dollars in medical bills and the person who hit them has, you know, the very bare minimum coverage. And hopefully they have the right coverage to make up that difference, but a lot of time they don't because they just don't know they need it or they got the minimum coverage to begin with.

SPEAKER_00 1:45

The the worst conversation you and I have to have with clients is there is not enough resources or insurance available to cover your losses. And we see this in death, loss a limb, some of the most serious cases. There's just nothing to go after. And the only thing that people can do to protect themselves is purchase higher levels of UM and UIM, right?

SPEAKER_01 2:07

Yes. That's the first thing you know we tell our employees when we hire them is hey, what's your insurance coverage? What's your UIM uninsured motorist coverage? Um, and it's the first thing I talk to the clients about when they come and tell us, hey, I've been in an accident. Let me see your policy, let me see what you have. And I tell even some of the most kind of educated clients we have don't realize that they need it. Um, and so go talk to your agent immediately, is what I tell them.

SPEAKER_00 2:33

Yeah, yeah, exactly. You roll into our office driving a Bentley and you got, you know, minor coverage that costs nothing. You know, it's it's it's definitely something that people need to focus on. Really, next question if someone hits me with no insurance or only $25,000, like we talked about, and my bills are over $200,000, what happens?

SPEAKER_01 2:53

Well, without UM or UIM coverage, you were left negotiating your hospital bills within that $25,000. Um, you know, most people, when they have $25,000 in coverage, you know, everyone's always wanting to go after personal assets. More than likely, if you have $25,000 bare minimum coverage, you don't have personal assets to go after. And those people can always declare bankruptcy and then get out of the c get out of any debt that they have. So it's very, very important that you make up that difference with your own policy.

SPEAKER_00 3:23

The the whole purpose of buying insurance in and of itself is to protect yourself or your family from unforeseen circumstances. And I would argue that it's more likely to be in a car accident than having maybe a house fire, right? But we buy all this insurance to cover a house fire, but no one ever focuses on what the most likely events are, right?

SPEAKER_01 3:42

Yeah.

SPEAKER_00 3:43

Yeah.

SPEAKER_01 3:43

And I think everyone just assumes that everyone else out there is doing their, you know, job and getting their insurance, getting more than minimum liability coverage. And that's just putting a lot of faith in your fellow man sometimes. So Yeah.

SPEAKER_00 3:58

And because of that faith, here's what's not fair. You're following the rules, you have insurance, you're paying your premiums, someone else runs a red light, destroys your life, and now you're on your own unless you specifically bought that coverage to protect yourself from someone else's bad decision making. But that's the system. You're paying to protect yourself from someone else's irresponsibility, like you said.

SPEAKER_01 4:21

Yeah. It's sad sometimes you see people who have overstate minimum liability coverage. So they have 100,000, 300 coverage. So they've protected their fellow person, but for some reason they only have 25,000 UIM coverage and they're just not thinking about themselves. And and you really do need to, you know, speak with your agent, sit down and figure out what you need yourself.

SPEAKER_00 4:43

Well, remember that we had one place where our client was she was a business owner, she was driving that Mercedes, she had her property damage insured for over $100,000 and she had minimum UIM of $25,000. Remember looking at that? What what were we taught telling each other?

SPEAKER_01 4:57

It's just amazing that I I, you know, I guess people just assume again that their fellow man's taking care of them. And and sadly, in Kentucky with only 25,000 minimum limits, that's not going to be the case.

SPEAKER_00 5:08

Yeah, and she was such a wonderful, wonderful person, wonderful client, had horrible injuries, had to have a neck surgery, and she had more insurance on her vehicle that can be repaired, repaired, and replaced better than a neck, right? Very, very sad situation. Next question What are the state's minimum limits and why aren't they enough?

SPEAKER_01 5:29

So Kentucky state minimum limits for a liability policy are it's $2550. So $25,000 is the most a person could get if injured, $50,000 total uh for a motor vehicle. Um, so you know, I I would uh say probably half the vehicles on the road today just carry those that minimum coverage.

SPEAKER_00 5:52

Yeah, it's amazing that our law hasn't really changed in that regard because the minimum limits has been the same for like 30 years, but uh has medical costs gone up?

SPEAKER_01 6:01

Inflation.

SPEAKER_00 6:02

Yeah, yeah. Yeah, and so why is that a problem?

SPEAKER_01 6:04

U well, because like you just said, it we see medical bills, you know, from taking the ambulance to your ER for that initial visit will be over $25,000. Yeah. Um, so uh I I'll get on my little high horse and say, everyone contact your legislature and say we need to raise our limits.

SPEAKER_00 6:24

100%.

SPEAKER_01 6:25

Uh but yeah, $25,000 doesn't get you very far uh when you're seriously injured.

SPEAKER_00 6:30

No, no, it's very sad in some of these conversations. Here's an interesting to statistic to back up what you just said, Kelly, and that is you know, it part of it's not fair. One in four drivers has no insurance at all. Most of the rest only have $25,000 of minimum limit coverage. So if you get seriously injured, the odds their insurance actually covers your injuries for basically zero. That's not fair, but that's the reality that we see every day, isn't it? Yeah, it is. All right, Kelly, let's let's talk about some real life examples here that we've handled. You know, tell the tell our viewers here about someone who was seriously injured. The at fault driver didn't have enough insurance, and the victim, our client, didn't have the UIM or UM coverage to make them whole. Tell tell the tell these folks what happened.

SPEAKER_01 7:18

So we've had sadly numerous cases like this. One of them that immediately comes to mind is a gentleman was on a motorcycle. Yep. Uh someone turns in front of him against a red light, catastrophic injuries. You know, he's lucky to be alive. Yep. Person who hits them doesn't have insurance. He has 25,000.

SPEAKER_00 7:38

Which is lucky for a motorcycle, right? Yeah, most motorcycles don't even have UIM.

SPEAKER_01 7:43

Yeah. So he has 25,000 UIM coverage. You know, his medical bills are in the millions, and he can't work ever again. And, you know, we're left trying to negotiate and and and set up what we can for him with $25,000.

SPEAKER_00 7:58

His wonderful wife came to our office wheeling him in a wheelchair because he could no longer walk himself. Not because his legs were injured, not because his hips or knees or anything like that were injured. He had such a severe brain injury from the accident, he could no longer walk. And I'll never forget meeting with that beautiful family and looking at them and saying, the person who hit you has nothing. They're not even insured. We ran a skip trace, there's no assets, and most motorcycles don't have UIM because it's so expensive, but at least you have 25, and there's no good options there, is there?

SPEAKER_01 8:39

No, no.

SPEAKER_00 8:39

Yeah. How often do we see that?

SPEAKER_01 8:42

More often sometimes than not. And and sadly, it seems to be some of those more serious accidents. Um when you when their lives are forever changed.

SPEAKER_00 8:52

Yeah. And so so what tell tell these viewers, because it's so interesting how you know UIM's following the person. Tell tell us, you know, what we mean by that when we we talk about in our industry what that UIM follows the person.

SPEAKER_01 9:07

So UIM will follow you if you are saying a passenger in a friend's vehicle, and you have no idea what your friend's insurance coverage is. You hope that they have good insurance. But if you've taken care of yourself and purchased UIM coverage, that coverage will follow you if you're a passenger in your friend's vehicle and they're in an accident. Or uh I've seen a case, Eastern Kentucky, school kids on a bus. Yeah. Great example. And someone uh hit the school bus, they had minimum limits, $25,000, $50,000. You have a bus full of children who are injured. And so thankfully, a lot of those kids on the bus had UIM coverage through their parents and got additional monies that were available.

SPEAKER_00 9:44

That's the greatest example. I mean, catastrophic bus crash. This they get hit by an uninsured driver, someone with minimum limits. And think about it, now there's $25.50 for 20 kids on a bus, right? The school does not have to purchase UIM. Correct. The drug the bus driver gets workers' comp because they're an employee, but none of the kids on the bus have any other insurance protecting them except their own parents' personal UIM, right? Exactly. And so we've we've obviously seen that example on multiple occasions and and watch that play out. So I think that's something that our viewers absolutely have to know. If there is nothing to take from today, is that if you have a family and you want to protect them, no one wants to be in an auto accident, do they?

SPEAKER_01 10:30

No.

SPEAKER_00 10:30

Nobody.

SPEAKER_01 10:31

No.

SPEAKER_00 10:32

However, there is a there is always some possibility that something's gonna happen. And it's not because you're a bad driver, it's because other people are bad drivers. But that's the only way we can protect ourselves and our family, right?

SPEAKER_01 10:43

We've seen a lot recently uh college students being hit as a pedestrian or on a scooter uh and having to rely on their parents' UIM coverage. So it it follows you wherever you may go. Yep. Uh and it's always important to have not only, like you said, for your own benefit, but for the benefit of your family.

SPEAKER_00 11:01

Yep, follows you out of state, too. Yeah. That's another great, great, another great example. So in our fairness example, the person did everything right, they followed the law, someone else made a mistake, but they're stuck with hundreds of thousands of dollars in medical debt, lost wages, because they didn't have their own coverage to fill these gaps. And that's not fair, is it?

SPEAKER_01 11:21

No, no, it's not.

SPEAKER_00 11:24

Now let's talk about what this does to people, not just financially, but emotionally. You know, obviously there's a there's a it's easy to understand the financial toll, but the emotional toll. Now, when someone is seriously injured and it's realized that the person who hit you can't pay and their own insurance doesn't have enough to cover it, what do our clients talk about how that feels?

SPEAKER_01 11:44

Oh, just extreme helplessness and and and just despair because their life has been forever changed. You know, they can't enjoy their, you know, family like they used to, they can't go to work like they used to. You know, their everyday life is forever altered, and there's nothing to help make them whole or to help them on this new path in life because it's we're stuck with $25,000.

SPEAKER_00 12:10

The example I always give is we had an associate that worked for us back in the day, and she had USAA coverage because she had some some dealings in the military and her family did, and she had $25,000 of UIM. And we went to her and said, What in the world are you doing? Up that. She went from $25,000 to $250,000. I say, Well, how much did that cost you? It was five dollars a month to go from $25,000 to $250,000. So that's the other thing people don't talk about is is this coverage is really, I mean, respectively cheap, right? You know, yeah. So I mean, we meet with all our clients, we talk to them about this coverage, and so we've spent all day today talking about how important the coverage is, but it's also I think important for our viewers to know it's also the cheapest coverage, right? What I mean, when you look you look at policies more than I do, what what do you see as kind of being the most expensive pieces of a policy for the premium versus UIM?

SPEAKER_01 13:03

Property damage. Yeah. It's always property damage. So uh again, we're going back to the original story we had, uh, people will you know insure their car, be sure that their car can get repaired before they're insure that though they themselves can be made whole after an accident.

SPEAKER_00 13:19

So it's just a lack of education, which is why we're doing this to begin with. If you if you break it down for people after the fact, it's like, wow, this is a no-brainer. What do you mean I have a hundred thousand dollar coverage on my Mercedes that costs me two grand a month or fifteen hundred dollars a month or whatever it costs, but I can get this coverage that really will help me, my lost wages, my medical bills, my pain and suffering. And it's five dollars a month to increase that. I mean, the economic analysis is so simple. You just want to kind of get on the mountaintop and scream it out to people. And you also kind of hope our legislature, like you said earlier, makes that change as well. Like, what are we doing allowing insurance companies to sell minimum coverage at $25,000 when you can't even go to the hospital, stay a night, have a couple CTs and x-rays to check you out? I mean, it's costing at some hospitals, it costs more than that. That one visit. Oh yeah. Oh, yeah. Yeah. To to that line, Kelly, we've talked about the state minimums, but when people say, well, what amount should I really be carrying? What's our answer for that?

SPEAKER_01 14:24

I would say at least 100, 300. So that would mean 100 for you if you're in an accident, if you're in an accident with your family, 300 to spare uh a split amongst your family. So I would I would comfortably say that would be the bare minimum that I would have, just based on, like I said, uh hospital visit easily after a serious accident is $25,000.

SPEAKER_00 14:45

Def definitely have more than enough to pay two years' worth of lost wages, right? So if you make, you know, $50,000 a year, you probably should have at least $100,000 in coverage because I think of the economics more than even the medical bills. But medical bills are so expensive, it has to be factored in too. But at a minimum, be able to pay yourself for a couple of years to allow yourself to get better, right? Um, and that's that's definitely gonna be budget dependent. It's gonna be, even though we talked about how cheap it is, it's gonna be budget dependent. It's gonna depend based on the based on the person, right?

SPEAKER_01 15:14

Yeah, yeah. Exactly. Okay, and it's always something you should talk to your insurance agent about. I mean 100%.

SPEAKER_00 15:19

There's nobody does.

SPEAKER_01 15:20

Yeah.

SPEAKER_00 15:20

And they don't sell it because it's so cheap, right? Yeah.

SPEAKER_01 15:22

Yeah.

SPEAKER_00 15:23

Yeah. I think the agents call that beer money. You know, they sell a couple of dollars worth of insurance and they call it beer money, and so they don't really care about that. Um, everyone listening that's still awake, go find your call art car insurance policy. Look at your declarations page, right? Find the uninsured, underinsured motorist provision in that. Sometimes it's called UM or UIM for abbreviation. If those numbers are lower than your property damage or especially and your liability coverage, or if it says they are rejected, you're not protected, are you?

SPEAKER_01 15:58

No.

SPEAKER_00 15:58

Yeah. No. Because another thing we haven't talked about on the rejection is people can sign rejections for UIM and you or UN, right? Yeah.

SPEAKER_01 16:06

And you're not covered at all.

SPEAKER_00 16:07

None. And they all that is is making your insurance more cheap so that when you go to buy insurance, you say, give me the cheapest stuff available, you're signing away this entire right that you may need later, right? Exactly. Exactly. And does Kentucky law uphold those signatures and that and that waiver?

SPEAKER_01 16:23

They do.

SPEAKER_00 16:24

100%, don't they? Yep.

SPEAKER_01 16:26

Yeah. That insurance company is quick to rip out, whip out that payment.

SPEAKER_00 16:29

Yeah, yeah, we're cheaper, but here's your coverage. And you know, once something bad happens, that's a bad, that's a bad lesson to learn, isn't it?

unknown 16:36

Yes.

SPEAKER_00 16:38

So for less than what most people spend on streaming services, you can protect yourself from financial catastrophe, medical bills, if someone without insurance destroys your life. And once you break down the economics, it's really not our decision. No, no. This one's gonna be fun. Because this confuse it does confuse people. So why would because once you settle with the at fault driver, that's when you go to your U UIM. Or if the atfault driver doesn't have insurance, you go to your UM. They fight us, don't they?

SPEAKER_01 17:11

They do, tooth and nail.

SPEAKER_00 17:12

Why so if I've never been through this process and I come meet with Justin and Kelly in their office, and I say, why in the world would my own insurance company fight me on a claim where this other driver ran a red light? They hit me, they don't have insurance, or they don't have enough, my medical bills are stacked. What in the world is happening here? What do we tell?

SPEAKER_01 17:33

It's still a business.

SPEAKER_00 17:34

Yeah.

SPEAKER_01 17:35

And despite the fact that you've been loyally paying your premiums, they want to be sure they get uh all the bang for their buck. So um they're not always on your side. They're not always the helping hand that they say they are. Um so yeah.

SPEAKER_00 17:51

Yeah. And they and sometimes we see UM and UIM, they will fight harder than the at fault carrier, won't they?

SPEAKER_01 17:58

Oh yeah. I am currently in a dispute with one of them uh trying to argue liability when the person who hit them, their insurance paid, admitted liability immediately, and their own insurance carrier right now is saying, Well, we're still investigating who's at fault. I'm like, your own insured. You need to be protecting your own insured.

SPEAKER_00 18:17

The the burden of proof is always on the plaintiff, whether it's the person who hit you or your own insurance coverage. It's always the burden of proof is always on the plaintiff. So you have to prove liability and you have to prove medical causation, meaning that the accident caused your injuries. And so it's amazing to see that the person who caused the accident will admit liability, but it gets to UMUIM, and they're like, no, we think there's a liability question. It's not fair, is it?

SPEAKER_01 18:41

No, not at all.

SPEAKER_00 18:42

But do they do it all the time? All the time. All the time. And it's amazing. Now, here's the good thing is what is the cause of action that would be available to people if their own insurance coverage tries to fight them needlessly and protract litigation?

SPEAKER_01 18:57

That is bad faith, the Kentucky Unfair Claims Settlement Practices Act.

SPEAKER_00 19:01

Yep. Yep. And then tell tell our folks here, you know, what are we allowed to do in that instance? Our own insurance coverage decides to fight us. We file what we call bad faith claim or consumer protection claims, which is a separate claim that we can bring as well. Tell tell tell our folks what are we doing when we're doing that?

SPEAKER_01 19:19

We are letting them know that we're not going to put up with that. Uh, and uh that we get to get in their underwear drawer. Yeah. And to see what is motivating them exactly uh in their valuation of a claim. Yeah. And it's amazing, you know, we've had several cases um against insurance companies where we get into the discovery, we get into the underwear drawer and see um that they have bonuses contingent on the amount of money that they don't pay out. Uh so you you yeah, it really is a business.

SPEAKER_00 19:53

It it it is a business, and and these causes of action are weapons that we get to use. I mean, these are pretty strong weapons. Kentucky is one state that continues to have good case law on first what we call first party insurance, bad faith claims, consumer protection claims, and allows us to be incredibly aggressive on behalf of our clients, to aggressively advocate for our position. And you and I, we've been doing that work for the we used to defend those cases, and now we now we now we sue them for for what's going on. So, you know, the I think the ultimate point is even if you're making a claim against your own policy, the policy you paid for to protect yourself, your insurance company may treat you like an adversary, you know, which is why you need to call us because that's a that's a big, big deal. And it's not fair. No. But guess what? It's how it works.

SPEAKER_01 20:42

Yeah. And I want to make a point. A lot of people say, Oh, I don't want to make a claim on my own insurance. I'm worried about my rates going up. Your rates have already gone up if you're in an accident.

SPEAKER_00 20:52

Yeah. So yeah, they're private businesses. I tell people all the time, insurance companies are a private business. So how they choose to handle rates is a private business activity for them. So this idea that I'm gonna buy coverage, but I don't want to use that coverage because it's gonna cost me more is a is very bad logic to use.

SPEAKER_01 21:11

Yeah.

SPEAKER_00 21:11

It's literally the exact opposite of the logic you should be using, right? No. You're right. We get that all the time.

SPEAKER_01 21:17

I yeah, I get that all the time. And I just want to be like, no, it's okay.

unknown 21:20

Yep.

SPEAKER_01 21:21

That's why you pay it.

SPEAKER_00 21:23

Here's the not fair part. The law requires you to have insurance, but the minimum insurance law doesn't even come close to covering harms and losses for many people. You're legally required to buy something that doesn't actually fully protect you. One in four drivers on the road now has no insurance at all. So many of the rest have minimum coverage of $25,000, which may not cover your initial hospital visit. That means if you get seriously injured, your only real protection is the insurance you buy yourself. That's not fair, but that's the system. So here's what to do today: find your insurance policy or call your insurance agent. Check your UM or UIM coverage, uninsured or underinsured motorist coverage. If it's less than your property damage or liability limits, or if it says rejected, call your agent tomorrow, change it, look what fits within the family budget. It's probably going to because it's so cheap. They don't sell it because it's just small amounts of money. But you can control how these things play out when the unforeseen happens. When these unforeseen terrible things happen, you can start to have the control of that. Don't let other people control your life. You control it.

SPEAKER_01 22:41

Thanks for having me, Justin.

SPEAKER_00 22:43

This is it's not fair. A podcast about the moments that determine outcomes before most people know the game's even started. I'm Justin Peterson, and this is Kelly Collins, who is the managing partner at Peterson Law. If you're listening to this and you don't know what your UI UM and UIM coverage is today, go find out. Call us if you want us to look at your policy as well, because the person who hit you may not have enough money to cover your losses. And if you don't have your own coverage to fill that gap, you're on your own. Thanks for listening.