What Are Kentucky's Car Insurance Requirements?

In Kentucky, you can't legally operate a registered vehicle unless you carry car insurance of at least:

• $25,000 in liability coverage for injuries per person, in a single accident you caused
• $50,000 in total liability coverage, for all injuries resulting from a single accident you caused
• $10,000 in liability coverage for property damage resulting from any accident you caused, and
• $10,000 in "personal injury protection" (PIP) coverage under the state's "choice no-fault" system.

Let's look closer at car insurance coverage rules in Kentucky and how they're bound to come into play after a car accident.

How Does "Choice No Fault" Car Insurance Work in Kentucky?

Kentucky is one of around a dozen states that follow some variation of no-fault car insurance for purposes of compensation for car accident injuries.

In a traditional no-fault state, each driver turns to their own car insurance policy to get compensation for medical bills and certain other financial losses stemming from the accident, regardless of who was at fault. No liability claim against the at-fault driver is possible unless the circumstances allow for an exemption from the no-fault system (more on these circumstances later).

What Is Covered Under Kentucky No-Fault Car Insurance?

In Kentucky, no-fault takes the form of "personal injury protection" (PIP) benefits, which pay up to $10,000 for:

• medical bills resulting from car accident injuries
• lost wages, and
• similar "out of pocket" costs resulting from the accident, i.e. the cost of hiring someone to perform household tasks you're unable to do because of your injuries.

Note that higher benefits (more than the basic $10,000) are available at an additional cost when you purchase a car insurance policy in Kentucky.

Who Is Covered Under Kentucky No-Fault Car Insurance?

After an accident, it's not just the policyholder who is entitled to PIP benefits in Kentucky. Other covered individuals include:

• anyone who was driving or riding in the vehicle at the time of an accident, and
• a pedestrian or bicyclist hit by the covered vehicle.

Can You Opt Out of No-Fault Car Insurance in Kentucky?

Vehicle owners may essentially "opt out" of the no-fault system when buying a car insurance policy in Kentucky. By opting out, the policy purchaser preserves the right to pursue a liability claim or personal injury lawsuit against the at-fault driver.

Of course, by opting out, the policyholder also opens him/herself up to the risk of being sued, if found at fault for the crash. This is why Kentucky's system is known as "choice no-fault." But remember, by opting out of no-fault, you're not entitled to mandatory first-party PIP benefits from your own insurer.

The rejection of no-fault must be in writing, on a special form filed with the state's Department of Insurance. (See the Kentucky No-Fault Rejection Form from the state's DOI) Unless and until the Department of Insurance is notified, in writing, of any changes to the driver's car insurance elections, the rejection will remain in effect.

Note: If every member of a household files no-fault rejections with the Department of Insurance, any car insurance policy on a family vehicle must include "guest" PIP coverage, which will apply to a passenger or pedestrian who is injured in an accident involving the family vehicle.

What Are the No-Fault Thresholds in Kentucky?

Even when a vehicle owner decides to go with no-fault coverage, if their car accident injury claim meets the statutory threshold, it will be exempt from the no-fault rules (again, that means a liability claim or lawsuit is possible against the at-fault driver). In Kentucky, those thresholds are:

• the accident resulted in at least $1,000 in medical bills, or
• the accident caused the claimant's permanent disfigurement, fracture of a weight-bearing bone; compound, compressed, or displaced fracture of any bone; any permanent injury, or any permanent loss of a body function.

Does Kentucky No-Fault Insurance Apply to Vehicle Damage?

The no-fault car insurance rules we've discussed here only apply to injury claims after a car accident. You're free to pursue a vehicle damage claim against the at-fault driver after a car accident—by filing a third-party car insurance claim through that driver's car insurer, or a small claims court lawsuit, for example.

What Does Liability Car Insurance Cover in Kentucky?

Liability car insurance applies to cover injuries and vehicle damage suffered by other drivers and passengers in a car accident you (or someone covered by your policy) caused. Liability car insurance never covers your own crash-related injuries or vehicle damage, only the losses of others.

You can always purchase a car insurance policy with higher liability limits than the minimums listed at the top of this article. If you're found at-fault for a car accident, and the injured person's losses exceed the limits of your coverage, you'll be on the hook to make up the difference out of your own assets.

Do I Need Uninsured Motorist Coverage in Kentucky?

When you buy car insurance in Kentucky, you need to either add uninsured motorist (UIM) coverage to your policy, or decline UIM in writing. This kind of coverage can be crucial if you're in an accident with an uninsured driver, or you're injured in a hit-and-run car accident.

What Are the Penalties for Driving Uninsured in Kentucky?

If you fail to keep required insurance on your vehicle in Kentucky, you'll almost certainly have your vehicle registration revoked, and you could face a fine of $500 to $1,000, plus up to 90 days in jail.

What's Next After a Kentucky Car Accident?

Get more details on Kentucky car accident laws that could come into play after a crash. And if you've been involved in a wreck and you're looking for more than just information, get tips on when you might need a lawyer's help after a car accident.