In this article, we'll discuss how Kentucky's "no-fault" car insurance system works, including how Kentucky vehicle owners and others can reject no-fault in favor of increased options after a car accident. We'll also summarize the kinds of insurance coverage that vehicle owners are required to carry under Kentucky law. If you're looking for more general information on the legal rules related to car accidents in Kentucky, you'll find it in our companion article Car Accident Laws in Kentucky.
Kentucky is one of around a dozen states that have some version of a no-fault car insurance system in place. In a no-fault state, the "personal injury protection" coverage of each driver's policy will typically pay for medical expenses and other financial losses after an accident, regardless of who was at fault for the crash, unless the claim qualifies for exemption from the no-fault system.
In Kentucky, PIP benefits pay up to $10,000 per person per accident for medical bills, lost wages and similar "out of pocket" costs due to an injury (though a policyholder can opt for higher benefits at a cost). PIP benefits will cover not only the vehicle owner's injuries after an accident, but also the injuries of anyone in the vehicle at the time of the accident, and even the injuries of a pedestrian hit by the covered vehicle.
Rejecting No-Fault in Kentucky
Kentucky vehicle owners may opt out of the no-fault system when they first purchase their policy, and preserve the right to sue (and run the risk of being sued) after a car accident. This is sometimes referred to as "choice no-fault." By choosing this option, if you're involved in a car accident, you're free to pursue a liability claim or personal injury lawsuit against the at-fault driver, but you're not entitled to any mandatory first-party PIP benefits from your own insurer, and you're also opening yourself up to the prospect of a lawsuit if you cause an accident.
Under Kentucly law, the rejection of no-fault must be in writing, on a special form that's filed with the state's Department of Insurance. (See the Kentucky No-Fault Rejection Form, from the state's Department of Insurance.) The rejection remains in effect until the Department of Insurance is notified, in writing, of any changes to car insurance elections.
Finally, if all members of a household file no-fault rejections, any car insurance policy on a family vehicle must include guest PIP coverage, which will apply to any guest passenger or pedestrian who is injured in an accident involving that vehicle.
Liability Thresholds in Kentucky
For drivers who choose to stick with no-fault coverage in Kentucky, if their claim meets certain thresholds, it will also be deemed exempt from no-fault rules so that a liability claim or lawsuit is possible against the driver who caused the accident. In Kentucky, those thresholds are:
Keep in mind that the no-fault rules only apply to personal injury; you're free to pursue a vehicle damage claim against the at-fault party after a car accident.
Besides the PIP coverage discussed above, Kentucky requires that any operator of a motor vehicle maintain certain amounts of liability insurance on that vehicle. The minimum coverage requirements in Kentucky are:
Note: While these are the minimum amounts of liability coverage you're required to carry under Kentucky law, you can purchase a policy with greater limits. If you are liable for an accident and that liability exceeds the other party's PIP and the maximum amount of your policy, then you will be on the hook to make up the difference out of your own pocket.
For more information on Kentucky's motor vehicle insurance requirements straight from the government, see the Kentucky Department of Insurance's webpage on auto insurance.