Kentucky is a "choice no-fault" state. As such a KY motorist can choose to insure their vehicle under the tort system or the no fault system.

Under a tort system each driver involved in an accident is responsible for the property damage and/or bodily injury they caused. Also with a KY tort system you retain the right to sue the other driver in an accident for the cost of expenses related to injuries sustained in the accident.

Under the KY 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.

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.

Under either the no-fault or tort system, drivers in Kentucky are required to purchase basic liability coverage (bodily injury and property damage) in the state’s minimum amounts of 25/50/10. Uninsured and underinsured motorist must be offered by an insurance company but can be waived in writing if one does not wish not to purchase these coverages. In addition, PIP coverage must be purchased for all passengers that are not immediate family members.

If you choose the no fault option, basic KY PIP coverage is $10,000 for medical expenses, loss of income or services, and funeral expenses.