Kentucky Automobile Insurance
The state of Kentucky follows a “Choice No-Fault” system meaning drivers may reject the No-Fault system options and retain the right to sue (Tort system) for any auto-related injury.
“No-Fault” Automobile Insurance
A driver that chooses to abide by the no-fault principle will be covered by their own insurance company in the event of an accident and forfeit their right to sue the other driver for their medical expenses unless their expenses exceed a certain amount. Under the Kentucky no-fault insurance system, you are required to purchase personal injury protection (PIP) coverage that helps pay the cost of injuries regardless of who was at fault in the accident.
Tort System Insurance
If a driver chooses to follow the traditional tort system rather than go with a no-fault policy they retain the right to sue the other driver for the damages.Anyone who registers, operates, maintains, or uses a motor vehicle in Kentucky is deemed to have accepted limitations on their rights to sue and be sued (tort rights). This means injured people cannot recover medical expenses, wage loss, other expenses, or pain and suffering from the at-fault party unless their injuries exceed certain thresholds. The thresholds are $1,000 in medical expenses, a broken bone, permanent disfigurement, permanent injury, or death.If all members of a household reject the limitations on their rights to sue and be sued, guest Personal Injury Protection (Guest PIP) coverage must be included on their insurance policy to provide basic PIP benefits to guest passengers and pedestrians. Liability premiums may be higher due to no-fault rejection, since others will have the same right to sue the rejecter for injuries that do not reach the thresholds.If a no-fault rejection form is on file, that individual is not entitled to receive basic PIP benefits. Individuals who have rejected can “buy-back” the basic PIP coverage.
Personal Injury Protection (PIP) Coverage
Kentucky requires basic PIP coverage on all motor vehicles except motorcycles. Basic PIP is to be paid by the insurer of the vehicle in which the injured person is riding at the time of an accident, or the vehicle that strikes a pedestrian, regardless of who was at fault in the accident. Basic PIP provides up to $10,000 per person per accident for medical expenses, lost wages, and similar “out of pocket” costs due to an injury. Higher benefits and deductibles are optional. Individuals with excellent health insurance benefits may elect to carry only a minimum PIP policy.
Kentucky “Buy Back” PIP
When buying the basic PIP coverage in Kentucky you forfeit your right to sue the other driver in an accident for the cost of injuries, unless the cost exceeds a certain level set by the state. Kentucky insurance companies will allow you to buy back that right (even though you carry PIP) for an increase in your premium. This is what “buy back” PIP refers to, paying an increase in your insurance rates for carrying PIP so that you can still retain your right to sue another driver instead of giving up that right as you would under a normal PIP insurance plan.
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