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Kentucky Auto Insurance Quick Facts

Kentucky insurance laws maintain that Kentucky drivers must carry basic no-fault personal injury insurance and liability insurance to be in compliance with the laws. However, these requirements are only minimum and do not include all the coverages that are available to most policyholders and their situations. It is important to consider your specific situation when purchasing a policy and pick the insurance coverages that best meet your needs. These quick auto insurance facts with help you make informed decisions about your Kentucky auto insurance purchases.

What is No-Fault Coverage?

No fault coverage, also called Personal Injury Protection (PIP), will reimburse drivers and their passengers for medical and out-of-pocket expenses that result from an accident. Auto insurance carriers pay this coverage only to their policyholders and passengers, but not to the other party. This coverage is paid regardless of fault and provides immediate protection, even before the accident investigation is complete.

Right to Sue

No-Fault coverage, or PIP, places limits or thresholds on the policyholder’s right to sue after an accident. If PIP is in place, the injured policyholder can only litigate against the negligent party for bodily injuries if he or she has suffered a broken bone, permanent injury, incurred medical expenses that exceed $1,000 or was killed as a result of the accident.

Can I Reject No-Fault Coverage?

Yes. If you choose to maintain your full right to litigate, you must reject the No-Fault coverage. This rejection must be captured in writing and the rejection form must be filed with the Kentucky Department of Insurance and the Department of Motor Vehicles. The insurance agent or representative will provide the required rejection form, if you choose to reject the coverage.

Do I Need Physical Damage Coverages?

Physical damage coverages include comprehensive and collision coverages. These coverages protect your vehicle against damages. The Kentucky Department of Insurance does not require its drivers to carry physical damage coverages. These are optional and can be applied to one or more vehicles on the policy, if requested. Policyholders that lease or finance their vehicles may be required to maintain physical damage coverages on their auto insurance policy in order to comply with their vehicle contract.

Why Did the Insurance Company Total My Car?

Kentucky law requires auto insurance carriers to declare vehicles as a total loss when the cost to repair the vehicles damage exceeds 75% of its retail value. The retail value is determined by using the values assessed by the National Automobile Dealers’ Association (NADA).

What about Cancellations?

Kentucky policyholders can cancel their policies at any time. Policyholders are not required to wait until the end of the policy term to switch to another carrier. In addition, Kentucky insurance carriers reserve the right to cancel the auto insurance policy for any of the following reasons:

  • Fraudulent insurance activity or material misrepresentation of information
  • Nonpayment of policy premium
  • Suspension or revocation of the policyholder’s license and/or registration. This includes any person insured under that policy



Kentucky auto insurance carriers are required to provide their policyholders with a 14-day notice for nonpayment cancellations. The policyholder receives a 20-day notice of cancellation if the policy is being cancelled for license or registration suspensions. Kentucky carriers are not required to provide advanced notification for cancellations that result from fraudulent activity or misrepresentation. Insurance carriers must also provide policyholders with no less than 75 days’ notice if the policy is being non-renewed.