Legislation pending in Kentucky House to do away with the "contact rule" for uninsured motorist benefits
Rep. Darryl Owens of Louisville has proposed legislation whose time has come - eliminating the "contact rule" for uninsured motorist benefits when hit by an "unknown motorist". This is sometimes referred to as the "hit and run" rule, but in that situation coverage is provided since there has been a "hit" or contact.
The contact requirement is historically an outgrowth of the insurance industry's efforts to reduce fraud. However, the contact rule would have denied uninsured motorist benefits even if the accident had been caught on tape and witnessed by half of Louisville during Derby week!
For example, in recent news story, a young man was run off the interestate by an unknown trucker. He crossed the center line and was struck by a police officer. Result - no contact, no known driver, no coverage.
The no contact rule has also produced the bizarre situation where one insurance company was able to deny coverage to its insured's estate in a fatality caused by an unknown, but no contact, motorist, but then the insurance company was able to use the unknown motorist to shift the fault in defense of the underinsured motorist claim arising from the negligence of the third driver who actually did make contact with the insured's car killing one and seriously injuring the other!
Here's the pending legislation:
House Bill 271 (Expand Definition Of Personal Injury Accident):
Introduced by Rep. Darryl Owens on February 6, 2007, to establish that physical contact is not required to recover damages in personal injury or wrongful death claims arising from certain vehicle accidents.
Details and Comments: http://www.kentuckyvotes.org/Legislation.aspx?ID=51087
See,
KENTUCKY FARM BUREAU MUT INS CO V. RYAN
INSURANCE - Uninsured motorist; Underinsured motorist
CIVIL PROCEDURE - Apportionment, Warning order attorney
2003-SC-000944-DG.pdf
Published, reversing, JOHNSTONE
Date: 11/23/2005
The basic holding permitted a UIM carrier to third party an unknown motorcyclist defendant for purposes of apportioning fault even though there was no personal jurisdiction over that unknown motorcyclist. An odd twist in this case was that the UIM was also a UM carrier and was permitted to use the 'no contact' rule to defeat the plaintiff's claim for uninsured motorist benefits.
Comment: However for now, note the inconsistent positions permitted KFBM in talking what were essentially inconsistent positions by parsing the policy provisions and not reading the policy as a whole and ignore the intent and purpose of the 'no contact' rule to prevent fraudulent claims. Justice Johnstone wrote for the majority and made some black letter law pronouncements that a UIM claim is not controlled by the apportionment statute since it is a contract and not a tort and its tweener status (my word not his) does not change that fact. However, in a UIM case the damages are in tort and the third party claim for apportionment is permitted. Of course, would a constructively served third party complaint suffice if a direct action against the tortfeasor? Time will tell on that one, but in that scenario I would suggest a motion to dismiss by the plaintiff for failure to state a cause of action since indemnity in this situation is non-existent and apportionment is a legal conclusion and not a claim, Kevin Tucker case notwithstanding in creating the legal fiction.
