Kentucky No-Fault Insurance Explained

Short answer: Kentucky auto policies include $10,000 per person of basic personal injury protection (PIP), which pays regardless of fault. In exchange, you're limited in suing unless your injury crosses a legal threshold. Kentucky also lets each person keep full rights to sue by filing a no-fault rejection with the Department of Insurance before an accident, though rejecting gives up basic PIP.

Kentucky's two-part no-fault law

The Kentucky Department of Insurance describes the Motor Vehicle Reparations Act, enacted in 1975 and codified at KRS 304.39, as having two parts:

1. PIP coverage for medical bills, lost wages and similar out-of-pocket costs.
2. Limits on the right to sue and be sued for people who haven't rejected those limits.

Anyone who registers, operates, maintains or uses a vehicle on Kentucky roads is deemed to have accepted those limits unless they reject them. Alongside PIP, the department's rejection-form advisory lists required liability of 25/50/25 (or $60,000 combined) and uninsured motorist coverage unless rejected in a separate writing.

What basic PIP pays

Basic PIP, also called basic reparation benefits (BRB), provides up to $10,000 per person per accident. The department's rejection-form advisory says it covers:

• medical expenses;
• lost wages, up to $500 per week;
• replacement services; and
• survivor's benefits.

You can buy higher benefits and choose deductibles. The insurer of the vehicle you're riding in pays first, or the vehicle that hits you if you're a pedestrian. If that vehicle has no insurance, you claim on your own policy or a household member's policy. A last resort is the Kentucky Assigned Claims Plan. An uninsured vehicle owner can't collect basic PIP from any source.

The tort threshold

Under KRS 304.39-060, someone who hasn't rejected the limits can sue for pain and suffering only if:

• medical expenses exceed $1,000; or
• the injury involves permanent disfigurement, a bone fracture, loss of a body member, permanent injury, permanent loss of bodily function, or death.

Below that line, PIP handles the economic losses it covers, and no pain-and-suffering claim is allowed.

Rejecting the limits

Each person decides individually. A rejection:

• must be filed with the Department of Insurance, on its form or electronically, before an accident;
• stays in effect until revoked in writing;
• applies to you in any vehicle, yours or someone else's; and
• for a minor, ends when the minor reaches the age of majority.

The advisory adds that there's no exception for a rejection signed as a condition of employment. Insurers must tell buyers about the right to reject.

What you give up, and what you keep

You keep: the full right to sue an at-fault driver, regardless of injury size.

You give up: basic PIP benefits. Others also keep full rights to sue you, which the department says can raise your liability premium. You must prove the other driver was at fault, and your recovery is reduced by your share of fault.

People who reject can buy back basic PIP coverage under KRS 304.39-140(5). If everyone in a household rejects, the policy must include guest PIP to protect passengers and pedestrians.

Motorcycles are different

Basic PIP is optional on motorcycles. Unless it's bought for the motorcycle, neither the rider nor the passenger can collect basic PIP from any source. The department adds that a motorcyclist who skips PIP but doesn't file a rejection is still bound by the tort limits, and won't be able to recover the first $10,000 of an injury claim from the at-fault party. A rider can file a rejection that applies only to motorcycles.

Scenarios

A fender-bender in Lexington with $700 of chiropractic bills. PIP pays. Without a rejection on file, the injured driver generally can't sue for pain and suffering.

A Louisville driver who filed a rejection years ago breaks an arm. She can sue the at-fault driver, but she has no basic PIP unless she bought it back.

A motorcyclist who declined PIP and never filed a rejection. Medical bills may go unpaid by PIP, and the first $10,000 of the claim can't be recovered from the at-fault driver.

Bottom line

Unless you act, Kentucky's default is the no-fault trade: prompt PIP in exchange for limits on smaller lawsuits. Rejection is a personal, long-lasting choice with real tradeoffs, so read the department's advisory before signing.

Contact Alishahi Insurance or call (877) 711-4545. See insurance in Kentucky, auto insurance and motorcycle insurance.

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Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.