STUMBO, Justice.
This ease presents an issue that is an extension of the doctrine requiring an under-insured motorist insurance carrier, in order to preserve its subrogation right, to substitute its payment for that of the liability [57]*57carrier for the settling tortfeasor. See, Coots v.. Allstate Ins. Co., Ky., 853 S.W.2d 895 (1993). Here, the underinsured motorist carrier (UIM), Nationwide Mutual Insurance Company (hereinafter “Nationwide”), substituted its $50,000 for the same amount offered in settlement by the liability carrier, State Farm Automobile Insurance Company (hereinafter “State Farm”). When the case was submitted to the jury, it awarded only $26,-683 in damages. Of this $26,638, Nationwide was statutorily liable for $10,000 in basic reparation benefits (BRB) under the Motor Vehicle Reparations Act (MVRA). See KRS 304.39-020(2); KRS 304.39-040(1). Nationwide sought to recover $50,000, the entire amount of its substitution, from State Farm, but instead was allowed only the amount awarded by the jury in excess of Nationwide’s BRB liability — $16,683. The Court of Appeals affirmed and we accepted discretionary review.
The Court of Appeals framed the question presented as follows: “Who bears the risk of overpayment between the plaintiffs underinsured motorist earner and the tortfeasor’s liability earlier, when the plaintiffs underinsured motorist carrier has substituted payment of a proposed settlement to protect its subrogation rights and a jury awards the plaintiff less than the amount of the proposed settlement?”
Nationwide argues that it has been unfairly penalized in making the substitution as required to preserve its subrogation rights, because it had no liability at all in this case, a fact that could not be determined until the litigation of damages was complete. Nationwide’s argument is two-fold: It was not Nationwide who valued this claim at $50,000; rather, it was State Farm who made that determination, thus forcing Nationwide to advance the funds to preserve its contractual right of subrogation. To deny Nationwide the recovery of the money advanced is to punish Nationwide for exercising its right pursuant to contract. To deny the right to seek subrogation when no substitution is made is also to deny Nationwide its right to litigate whether UIM benefits are due at all.
The basis for requiring the substitution of payment is explained in Coots v. Allstate Ins.
Co., Ky., 853 S.W.2d 895, 901 (1993), where it is noted that:
[T]he subrogation right cannot be absolute because in some instances it is inimical to the right of the UIM insured to settle with the tortfeasor and his liability insurer for the policy limits. This is so because, before making such payment of the policy limits the tortfeasor’s insurer will routinely demand, as was done in the present eases, full release and indemnification against future claims against the tortfeasor by the UIM carrier. Indeed the liability carrier’s obligation to its own insured to defend in good faith requires that it extract such a release rather than leave its own insured unprotected....
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If UIM coverage is to accomplish its remedial purpose as intended by the MVRA, the UIM carrier’s contractual sub-rogation right must not obstruct the UIM insured’s right to settle for the policy limits even if it means releasing subrogation.
Here, the right of the insured to settle was not interfered with, indeed, it was facilitated by the substitution of the payment by the UIM carrier. It was only when the matter went to trial that the actual amount of the liability due the injured party was determined and the “overpayment” discovered.
In reaching its decision affirming the judgment of the trial court, the Court of Appeals noted that the system set up by the Coots decision accomplishes the remedial purposes of the MVRA in that the plaintiff can receive the amount of the tortfeasor’s policy limits, either from the liability carrier or from the UIM carrier without having to obtain a judgment. The tortfeasor has an incentive to settle, in that he may obtain a release from further liability, and the tortfeasor’s liability earner protects itself from a bad faith action by making the offer for policy limits. The plaintiff can then proceed against the UIM carrier and the UIM carrier can preserve its right of subrogation.
In holding that it is the UIM carrier that should bear the risk of overpaying the plaintiff, the Court of Appeals stated that doing so encourages the UIM carrier to make an in[58]*58formed decision as to whether its subrogation rights are valuable or simply illusory. Since UIM benefits are payable only when the tortfeasor’s liability exceeds the tortfeasor’s policy limits, the UIM carrier must determine the value of the plaintiff’s claim and the value of the potential subrogation claim when the liability carrier has offered the policy limits. The UIM carrier must determine, before it substitutes payment, the strength of the plaintiffs claim, the extent of the plaintiffs damages and the likelihood of being reimbursed by the tortfeasor for UIM benefits. It is appropriate that these matters be fully examined by the UIM carrier before it interferes with a settlement, and it should do so only when it finds those subrogation rights to be truly valuable.
As correctly noted by the Court of Appeals, a substitution by the UIM of the amount offered in settlement does not truly result in a settlement. The tortfeasor remains in a position of potential liability should the judgment exceed the amount of his policy limits. Further should the tortfea-sor refuse to settle, instead going to trial, the jury could absolve him or her of liability or adjudge the liability to be less than the policy limits. Thus, if the UIM carrier can substitute payment without any risk, then the tort-feasor may be in a better position if he does not make a settlement offer at all to the plaintiff. With the risk of a bad decision on the UIM carrier, the UIM carrier is forced to make an informed decision and a realistic assessment of the offer. Further, it promotes finality between the plaintiff and the tortfeasor when the UIM carrier decides that its subrogation right has no value. Finally, the Court of Appeals concluded that placing the risk of loss on the UIM carrier also simplified the determination of UIM coverage. Once the issue of liability is decided, the only question remaining is the amount of damages. Hence the time and expense of the subsequent proceedings will also be reduced.
When analyzed, it is clear that the Court of Appeals decided that the UIM carrier must determine its own destiny: if it chooses to substitute payment based on the risk evaluation of the liability carrier, it is bound by that assessment when the time to assert its subrogation rights arrives. We believe that this appraisal of the policy arguments behind the decision rendered by the lower court is both accurate and logical.
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STUMBO, Justice.
This ease presents an issue that is an extension of the doctrine requiring an under-insured motorist insurance carrier, in order to preserve its subrogation right, to substitute its payment for that of the liability [57]*57carrier for the settling tortfeasor. See, Coots v.. Allstate Ins. Co., Ky., 853 S.W.2d 895 (1993). Here, the underinsured motorist carrier (UIM), Nationwide Mutual Insurance Company (hereinafter “Nationwide”), substituted its $50,000 for the same amount offered in settlement by the liability carrier, State Farm Automobile Insurance Company (hereinafter “State Farm”). When the case was submitted to the jury, it awarded only $26,-683 in damages. Of this $26,638, Nationwide was statutorily liable for $10,000 in basic reparation benefits (BRB) under the Motor Vehicle Reparations Act (MVRA). See KRS 304.39-020(2); KRS 304.39-040(1). Nationwide sought to recover $50,000, the entire amount of its substitution, from State Farm, but instead was allowed only the amount awarded by the jury in excess of Nationwide’s BRB liability — $16,683. The Court of Appeals affirmed and we accepted discretionary review.
The Court of Appeals framed the question presented as follows: “Who bears the risk of overpayment between the plaintiffs underinsured motorist earner and the tortfeasor’s liability earlier, when the plaintiffs underinsured motorist carrier has substituted payment of a proposed settlement to protect its subrogation rights and a jury awards the plaintiff less than the amount of the proposed settlement?”
Nationwide argues that it has been unfairly penalized in making the substitution as required to preserve its subrogation rights, because it had no liability at all in this case, a fact that could not be determined until the litigation of damages was complete. Nationwide’s argument is two-fold: It was not Nationwide who valued this claim at $50,000; rather, it was State Farm who made that determination, thus forcing Nationwide to advance the funds to preserve its contractual right of subrogation. To deny Nationwide the recovery of the money advanced is to punish Nationwide for exercising its right pursuant to contract. To deny the right to seek subrogation when no substitution is made is also to deny Nationwide its right to litigate whether UIM benefits are due at all.
The basis for requiring the substitution of payment is explained in Coots v. Allstate Ins.
Co., Ky., 853 S.W.2d 895, 901 (1993), where it is noted that:
[T]he subrogation right cannot be absolute because in some instances it is inimical to the right of the UIM insured to settle with the tortfeasor and his liability insurer for the policy limits. This is so because, before making such payment of the policy limits the tortfeasor’s insurer will routinely demand, as was done in the present eases, full release and indemnification against future claims against the tortfeasor by the UIM carrier. Indeed the liability carrier’s obligation to its own insured to defend in good faith requires that it extract such a release rather than leave its own insured unprotected....
[[Image here]]
If UIM coverage is to accomplish its remedial purpose as intended by the MVRA, the UIM carrier’s contractual sub-rogation right must not obstruct the UIM insured’s right to settle for the policy limits even if it means releasing subrogation.
Here, the right of the insured to settle was not interfered with, indeed, it was facilitated by the substitution of the payment by the UIM carrier. It was only when the matter went to trial that the actual amount of the liability due the injured party was determined and the “overpayment” discovered.
In reaching its decision affirming the judgment of the trial court, the Court of Appeals noted that the system set up by the Coots decision accomplishes the remedial purposes of the MVRA in that the plaintiff can receive the amount of the tortfeasor’s policy limits, either from the liability carrier or from the UIM carrier without having to obtain a judgment. The tortfeasor has an incentive to settle, in that he may obtain a release from further liability, and the tortfeasor’s liability earner protects itself from a bad faith action by making the offer for policy limits. The plaintiff can then proceed against the UIM carrier and the UIM carrier can preserve its right of subrogation.
In holding that it is the UIM carrier that should bear the risk of overpaying the plaintiff, the Court of Appeals stated that doing so encourages the UIM carrier to make an in[58]*58formed decision as to whether its subrogation rights are valuable or simply illusory. Since UIM benefits are payable only when the tortfeasor’s liability exceeds the tortfeasor’s policy limits, the UIM carrier must determine the value of the plaintiff’s claim and the value of the potential subrogation claim when the liability carrier has offered the policy limits. The UIM carrier must determine, before it substitutes payment, the strength of the plaintiffs claim, the extent of the plaintiffs damages and the likelihood of being reimbursed by the tortfeasor for UIM benefits. It is appropriate that these matters be fully examined by the UIM carrier before it interferes with a settlement, and it should do so only when it finds those subrogation rights to be truly valuable.
As correctly noted by the Court of Appeals, a substitution by the UIM of the amount offered in settlement does not truly result in a settlement. The tortfeasor remains in a position of potential liability should the judgment exceed the amount of his policy limits. Further should the tortfea-sor refuse to settle, instead going to trial, the jury could absolve him or her of liability or adjudge the liability to be less than the policy limits. Thus, if the UIM carrier can substitute payment without any risk, then the tort-feasor may be in a better position if he does not make a settlement offer at all to the plaintiff. With the risk of a bad decision on the UIM carrier, the UIM carrier is forced to make an informed decision and a realistic assessment of the offer. Further, it promotes finality between the plaintiff and the tortfeasor when the UIM carrier decides that its subrogation right has no value. Finally, the Court of Appeals concluded that placing the risk of loss on the UIM carrier also simplified the determination of UIM coverage. Once the issue of liability is decided, the only question remaining is the amount of damages. Hence the time and expense of the subsequent proceedings will also be reduced.
When analyzed, it is clear that the Court of Appeals decided that the UIM carrier must determine its own destiny: if it chooses to substitute payment based on the risk evaluation of the liability carrier, it is bound by that assessment when the time to assert its subrogation rights arrives. We believe that this appraisal of the policy arguments behind the decision rendered by the lower court is both accurate and logical.
Nationwide contends, without citation to any authority, that because Sate Farm evaluated the claim and offered the policy limits settlement, State Farm should be the one to pay the settlement amount. This argument has some superficial appeal, but does not take into account the non-finaneial factors that a liability carrier must consider in arriving at a settlement figure. While the UIM carrier can focus primarily on the actual damages suffered by the injured party, who is after all the UIM’s insured, and whether its own coverage is likely to be called upon, the liability carrier must keep in mind its obligation to vigorously defend the tortfeasor without exposing its client to potential personal liability. Factors such as whether the tortfeasor is likely to be found hable, the ability of the tortfeasor to testify and whether he or she will make a good witness as opposed to the sympathy the injured party could evoke in a jury, and the extent of the tortfeasor’s personal property and other obligations which could be at risk if a trial ensues, are all pertinent to the liability carrier’s decision whether to settle. Thus, the liability carrier’s decision to make an offer does not depend solely on the economic factor of provable damages.
While the UIM carrier will also consider the same factors in evaluating the settlement offer of the liability carrier, it has the cushion of subrogation if it decides to substitute payment, as well as the certainty of knowing that there will have to be a substantial award before its own money is at risk. Again, each insurance carrier has an independent responsibility and duty to its own insured. The factors considered by each in evaluating a settlement figure may be similar, but the function of the insurance coverage is different and what may be a reasonable settlement for one carrier will be unreasonable for the other.
Nationwide has also argued that there is a violation of its due-process rights under both the Kentucky and United States Constitu[59]*59tions, as well as its right to free access to the courts guaranteed by Section 14 of the Kentucky Constitution. We decline to address these Constitutional issues, however, since it appears that they were not properly preserved in either the trial court or the Court of Appeals and, thus, are not preserved for our review.
For the reasons set forth in this opinion, we hereby affirm the decision of the Court of Appeals.
JOHNSTONE, LAMBERT, and WINTERSHEIMER, JJ., concur.
COOPER, J., dissents by separate opinion, in which STEPHENS, C.J., and GRAVES, J., join.