The Kentucky Motor Vehicle Reparations Act requires that motorists carry liability insurance and no-fault protection before registering their vehicles or driving on the road. Coverage amounts must be not less than $25k/$50/$10 and $10,000, respectively.
There are two occasions when your insurance status will be verified in the Bluegrass State. First is when you are registering or renewing your vehicle registration with the Kentucky Transportation Cabinet (KYTC), who will be checking your insurance through the Kentucky Insurance System online (so make sure your insurer has updated your information). Second is when you are pulled over on the road; either a paper copy or electronic image of your insurance ID card will suffice.
|Kentucky Required Car Insurance Coverage||KY Required Min. Limits|
|Bodily Injury (BI)||$25,000 per person / $50,000 per accident|
|Property Damage (PD)||$10,000 per accident|
|Personal Injury Protection (PIP)||$10,000 per accident|
Kentucky Car Insurance Minimum Requirements
Your Kentucky insurance policy must at least contain liability insurance and no-fault insurance, which are made up of three coverages: bodily injury, property damage, and personal injury protection. Here is what that means for Kentuckians:
Bodily Injury (BI): whenever you cause a car crash in Kentucky, your BI covers any medical expenses you're liable for to the other party, who is injured because of you. For each accident, BI covers up to $50,000 in total, but does not pay more than $25,000 for each individual injured person. In case the other driver sues you, your insurer will also bear the costs for your lawyer under BI. Although only 25/50 is required, you should purchase higher limits if you want more protection. Higher limits vary by insurer in KY.
Property Damage (PD): in any accident you cause, when you damage any property that you do not own, PD covers the costs up to $10,000 per crash in a minimum KY policy. The most common claim you will need PD will likely be for the other driver’s car time in the shop or replacement parts. In the event that mailboxes or even houses are damaged, the expense may also fall under PD up to your limits. Anything beyond the limits is your own responsibility, so you may want to consider purchasing higher PD coverage.
Personal Injury Protection (PIP): Kentucky is a no-fault state, which means that every licensed auto insurance provider is obligated to pay for its policyholder’s medical expenses if you are ever injured in a car accident, regardless of fault. Basically, your PIP will at least cover up to $10,000 per accident of both medical bills and related benefits, such as weekly income loss benefits (up to $200/week) and funeral benefits. When you purchase PIP in Kentucky, there are several decisions to make:
- Deductible: you may choose whether or not you want to select a deductible amount. This is the portion of the bill you have to bear before your PIP kicks in for each accident. The higher your deductible (varies incrementally, and differs by insurer), the lower your PIP premium. You should choose an amount that will not put you under financial stress.
- Accept or Reject Coverage: Kentucky Insurance Code gives each driver the right to reject his or her basic PIP privilege. By submitting a “Kentucky No-Fault Rejection Form” with the Office of Insurance, you can exclude the coverage, which also lowers your auto insurance rates in KY. However, note that rejecting PIP will lead to an increase in your liability insurance (BI and PD coverage) premiums - it's best to compare the overall costs and benefits if you're considering this option to save on costs. Furthermore, even if all of your household members reject PIP, you will still need to carry a Guest/Pedestrian PIP with a small premium, which ensures any non-household member or pedestrian involved in your accident will still have the no-fault protection.
Your Right to Sue
In exchange for the no-fault protection, Kentucky motorists are limited in terms of their rights to sue the negligent driver for both economic (medical bills) and non-economic (pain and suffering) loss in an accident. However, there are exceptions to this limitation. Apart from rejecting your PIP privilege, your right to sue may also be reinstated if your loss in the accident meets the following thresholds:
Quantitative: your injuries from the accident end up costing more than $1,000 in medical expenses.
Qualitative: injuries of anyone in your party result in loss of a body member, permanent injury, permanent loss of one or more body functions, or even death.
Alternative Proof of Financial Responsibility
Purchasing an auto insurance policy most easily fulfills your financial responsibility as a Kentucky motorist. Nevertheless, you can choose to apply and become a self-insurer with the KYTC. You will receive a certificate of self-insurance when you meet all of the following requirements:
- Submit an application.
- Annually, submit balance sheet and income statement that reflects your last fiscal year’s financial condition. This is to verify that you do and will continue to have the ability to pay for any damage resulting from operation of any one of your insured vehicles.
- Submit a list of all the vehicles that are covered under your self-insurance.
- Place a security in the form of a surety bond, with the Executive Director of Insurance. The security needs to be $50,000 for the first vehicle, and $10,000 for each subsequent vehicle, but no more than $200,000 in total. The Director may ask you to deposit additional security if he or she decides that the current deposit is insufficient judging from the number of claims you have received throughout your self-insured period. When you voluntarily withdraw your self-insurance status, the Director will return your deposit when he or she finds that all of your judgments have been satisfied.