The longtime Kansas car insurance ripoff you probably don’t know about | Opinion

Dion Lefler’s spotlight on Kansas Insurance Commissioner Vicki Schmidt (“Calmly competent Republican recovers millions for Kansas insurance consumers,” Jan. 27) contains few statements one could quarrel with.

It is true that Commissioner Schmidt has been an evenhanded advocate for Kansas insurance consumers at a time when insurer regulation is desperately needed. She should be applauded for this.

But regulating insurance companies to make sure Kansans get a fair shake is only part of the battle. Making sure our insurance laws are fair to consumers is an equally important responsibility of lawmakers and the Kansas Insurance Department.

In fact, if you go to the Insurance Department’s website, you’ll see three words conspicuously posted in large font: Regulate. Educate. Advocate.

There is a lot more regulation, education and advocacy needed in Kansas when it comes to auto insurance.

There’s one category of coverage in every single Kansas auto insurance policy that most people don’t know or think about: UM and UIM.

Uninsured motorist — UM — coverage is attached to every policy and pays for medical bills and lost wages when you are injured by an uninsured, at fault driver.

Underinsured motorist — UIM — coverage pays the same losses when the at fault driver has some insurance, but not enough to pay you for the value of your claim.

Every insured Kansas driver is required by law to purchase UM and UIM coverage, even when they buy the most affordable coverage possible.

And every insured Kansas driver has been getting ripped off for years, every time they pay their premium.

Kansas’s outdated, little-known law, found at K.S.A. 40-284(b), states that any policy limit of UIM coverage is automatically reduced by the amount of coverage held by the underinsured driver who caused the wreck.

So, when you write a check for your premium and the policy declarations page says the UM/UIM coverage limits you purchased are $50,000, you actually have no idea how much you’ll get.

But if you purchase $25,000 in UIM coverage from your broker and write a check for the premium, here is exactly how much coverage you’re ultimately getting for your money: $0.

This is a sweet deal for insurers — the kind of deal that helped the industry score record profits of $88 billion in 2023.

If this example sounds far-fetched, it’s only because the reality is devastating to consumers.

Every year, countless Kansans who paid premiums for $25,000 in UIM coverage are badly injured in wrecks and find themselves in need of the coverage they paid for.

But since the irresponsible driver who hit them also carried $25,000 in liability coverage, the statutory “set-off” under K.S.A. 40-284(b) is applied, and $25,000 in UIM coverage minus $25,000 in liability coverage equals $0.

Year after year, lawmakers are reminded that this law needs fixing. Year after year, insurance companies do whatever is necessary to make sure the law stays broken.

Once again, lawmakers will have a chance this session to level the playing field between powerful insurers and ordinary Kansans by fixing this law.

And Commissioner Schmidt will have her opportunity to advocate as well.

“Consumer assistance is one of my top priorities,” Schmidt was quoted as saying.

Kansas auto consumers have needed assistance on this issue for quite some time.

Maybe this will be the year.

This story was originally published February 7, 2025 at 10:00 AM.