The parts of the personal auto policy (liability, medical payments, uninsured motorists, physical damage, duties after a loss) are covered in the national personal auto guide. Kentucky wraps that policy in the Motor Vehicle Reparations Act (MVRA), KRS 304.39. The MVRA makes Kentucky a choice no-fault state. Motorists receive no-fault basic reparation benefits (BRB) and accept a limit on suing, unless they formally reject that limit. Kentucky also sets its own rules for UM/UIM, cancellation and glass claims.

Choice no-fault

• Every motorist is deemed to accept BRB and a limitation on tort rights. Each person may reject the tort limitation instead (KRS 304.39-060).
• A rejection must be made in writing or electronically on the Department's form and filed with the Department of Insurance before the accident. It takes effect on filing and lasts until revoked.
• Someone who rejects keeps full tort rights, and can be sued without limit too, but can't collect BRB unless they bought optional coverage.
• Insurers must tell every buyer in writing about the right to reject.
• For people who keep the limitation, tort liability for bodily injury is abolished to the extent BRB is payable.

The tort threshold (304.39-060(2)(b)). A pain-and-suffering suit is allowed only if one of these applies:

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

Required security and minimum limits (304.39-080, 304.39-110)

• Owners must continuously maintain security for BRB and tort liability. Failing to do so leads to revocation of the vehicle's registration.
• Minimum liability: 25/50/25 — $25,000 per person, $50,000 per accident for bodily injury, and $25,000 property damage. A $60,000 single limit is also allowed.
• Liability must apply at least in the United States, its territories and possessions, and Canada.
• Motorcycles need only the liability coverage. Motorcycle riders get BRB only if they bought it as optional coverage, which insurers must offer (304.39-040).
• Mopeds, electric low-speed scooters and farm tractors aren't "motor vehicles" under the act (304.39-020(7)).

Basic reparation benefits (BRB, Kentucky's PIP)

• BRB pays net economic loss without regard to fault (304.39-040). Pain and suffering is not a covered loss.
• The maximum is $10,000 per person per accident (304.39-020(2)).
• Medical expense includes up to $5,000 for funeral, cremation and burial.
• Work loss, replacement services and survivors' loss are limited to $500 per week (304.39-130).
• Workers' compensation benefits are subtracted in figuring net loss (304.39-120).

Priority (304.39-050):

• The security on the vehicle occupied pays first.
• For a pedestrian, the security on the vehicle that struck them pays first.
• A passenger's own BRB applies if the primary obligor doesn't pay within 30 days.

Payment and interest (304.39-210):

• Benefits are paid monthly as loss accrues and are overdue 30 days after proof.
• Overdue payments bear 12% interest, or 18% if the delay lacked reasonable foundation.
• The insured may direct in writing how benefits are split among types of loss (304.39-241).

Options on request (304.39-140):

• added reparation benefits in $10,000 units, up to $40,000
• BRB deductibles of $250, $500 or $1,000

Assigned claims plan (304.39-160). It pays BRB when no coverage applies or can be identified, or when an insurer is insolvent. An owner hurt in their own vehicle that they failed to insure can't use it.

Time limits (304.39-230):

• A BRB claim is filed within two years after the loss is suffered and known, and no later than four years after the accident.
• A remaining tort suit is filed within two years of the injury, the death, or the last BRB payment, whichever is later.

Uninsured and underinsured motorist

• UM must be included at the 25/50 minimums unless a named insured rejects it in writing. The rejection covers everyone under the policy and carries over to renewals unless coverage is requested in writing (304.20-020(1)).
• An "uninsured" vehicle includes:
  • one whose insurer denies coverage
  • one whose insurer becomes insolvent within one year of the accident
  • one insured below the minimums
• UIM must be offered on request (304.39-320). An underinsured motorist is one whose liability limits are less than the judgment against them.
• UIM settlement procedure. Before settling with the at-fault driver's insurer, the insured notifies the UIM insurer by certified or registered mail. The UIM insurer then has 30 days to consent, or to pay the offered amount itself to preserve subrogation.
• The first renewal notice must say that added UM, UIM and PIP can be bought (304.20-040(13)).

Cancellation and nonrenewal (KRS 304.20-040)

During the first 60 days, a new policy may be cancelled for any reason with at least 14 days' notice.

After 60 days, cancellation is allowed only for listed reasons, such as:

• nonpayment
• fraud
• suspension or revocation of the license or registration of the named insured or a household driver

Notice periods:

• cancellation for nonpayment: at least 14 days, with the reason
• other cancellations: at least 20 days
• nonrenewal: at least 75 days, or the policy is deemed renewed on payment

A cancellation notice for any reason other than nonpayment must mention the assigned risk plan and the right to ask the Commissioner, within 7 days, to review the cancellation.

Prohibited reasons. An insurer may not decline, cancel or nonrenew solely because of:

• credit history, or extraordinary life events that hurt it, such as a spouse's death, identity theft or military deployment
• a disability that doesn't substantially impair mechanically assisted driving

Not covered by these rules: assigned risk policies and garage or auto-business policies.

No surcharge for not-at-fault accidents. Premiums may not rise solely because of a claim for an accident in which the insured was not at fault (304.20-045).

Other Kentucky auto rules

• Glass (304.20-060, 304.9-470).
  • A glass-only comprehensive claim is paid without a deductible.
  • Insurers may not require a particular glass shop.
  • Glass sellers may not offer rebates to cover a deductible.
• Arbitration. A clause in an auto liability policy requiring arbitration of future disputes is not binding on the named insured (304.20-050).
• Claim checks. Release language on a liability claim check doesn't release personal injury claims (304.20-070).
• Residual market. Every casualty insurer must belong to the Kentucky Automobile Insurance Plan (304.13-151).
• Total losses (806 KAR 12:095). The cash settlement covers a comparable vehicle plus taxes and fees. An insured who can't buy a comparable car may notify the insurer within 35 days.
• Fault rule. Kentucky allocates fault by pure comparative negligence (KRS 411.182). A partly at-fault claimant recovers, reduced by their share of fault.

Common exam traps

• Kentucky is choice no-fault. A tort rejection is filed with the Department before the accident.
• The BRB maximum is $10,000, with $500 a week for work loss and $5,000 for funeral costs.
• The tort threshold is $1,000 of medical expense or a listed serious injury.
• Minimum liability is 25/50/25 or a $60,000 single limit.
• UM is included unless rejected in writing. UIM is offered on request.
• Auto cancellation needs 14 days' notice for nonpayment and 20 days' otherwise. Nonrenewal needs 75 days.
• A glass-only claim carries no deductible.