Kentucky is a "choice no-fault" state when it comes to car insurance coverage and injury claims after an accident. In this article, we'll explain what that means for Kentucky vehicle owners, and we'll summarize other insurance coverage requirements for vehicles registered and in operation in the state.
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 his or her 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).
In Kentucky, no-fault takes the form of "personal injury protection" (PIP) benefits, which pay up to $10,000 for medical bills, lost wages and similar "out of pocket" costs resulting from the policyholder's car accident injuries (higher benefits are available at an additional cost).
After an accident, it's not just the policyholder who is entitled to PIP benefits in Kentucky. Anyone who was driving or riding in the vehicle at the time of an accident is entitled to receive PIP benefits under the policy, and a pedestrian hit by the covered vehicle can also receive PIP benefits.
Vehicle owners may essentially "opt out" of the no-fault system when choosing and purchasing 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.) 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.
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:
Keep in mind that the no-fault rules only apply to injury claims after a car accident; you're free to pursue a vehicle damage claim against the at-fault party after a car accident.
Besides PIP coverage, Kentucky requires vehicle owners to maintain minimum amounts of "liability" car insurance, which applies to injuries and vehicle damage suffered and sustained by others when you're at fault for an accident. The minimum liability coverage requirements in Kentucky are:
Note: You can always purchase a car insurance policy with higher liability limits. If you're found at-fault for an 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.
Get more information on Kentucky Car Insurance (from the state's Department of Insurance).