Kentucky is a “choice no-fault” state. As such, a Kentucky 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 Kentucky no-fault insurance system, you must purchase personal injury protection (PIP) coverage that helps pay the cost of injuries regardless of who was at fault in the accident. 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.
When buying basic personal injury protection 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 (threshold).
So if you pick the no-fault insurance system in Kentucky, you can sue for severe injuries and for pain and suffering only if the case meets certain conditions. These conditions, known as a threshold, relate to the severity of the injury.
No-fault states vary in that the threshold may be expressed in verbal terms (a descriptive or verbal threshold) or dollar amounts of medical bills, a monetary threshold. Some laws also include minimum requirements for the days of disability incurred due to the accident.
Kentucky, Kansas, Massachusetts, Minnesota, North Dakota, Utah and Hawaii use a monetary threshold. States with verbal thresholds include Florida, Michigan, New Jersey, New York and Pennsylvania. New Jersey and Pennsylvania are also choice no-fault states just as Kentucky is.
As for the threshold in Kentucky for injuries, it is discussed in the Insurance Code section of the Kentucky revised code
In section 304.39-060 of the KRS, it states in subsection 2(b) that:
Everyone who registers, operates, maintains or uses a motor vehicle in Kentucky accepted limitations on their rights to sue and be sued. Individuals injured due to another’s fault cannot seek compensation for medical bills, reduced income, other costs or pain and suffering unless their injuries exceed certain thresholds. The thresholds are $1,000 in medical expenses, permanent disfigurement, a broken bone, permanent injury, or death.
Any person who is entitled to receive free medical and surgical benefits shall be deemed in compliance with the requirements of this subsection upon showing that the medical treatment received has an equivalent value of at least one thousand dollars ($1,000).
Tort liability is not limited to injury to a person who is not an owner, operator, maintainer or user of a motor vehicle, nor for injury to the passenger of a motorcycle arising out of the maintenance or use of such motorcycle.
So when KY drivers accept no-fault insurance on their car insurance policy, then they agree to limit their ability to seek compensation for injuries caused by other drivers (a third-party claim) unless they have over $1,000 in medical expenses or suffer a serious or permanent injury (as the law above gives details on) as the result of an accident.
If you instead of a Kentucky motorist reject no-fault you can expect to pay a higher premium. However, you are unrestricted in your right to seek compensation for injuries caused by other drivers. By rejecting no-fault coverage, you are not protected from lawsuits if you cause injuries to another party in an accident.
Get free car insurance quotes for Kentucky car insurance here.
— Michelle Megna contributed to this story.
Kentucky Department of Insurance. “No Fault Rejection/Verification (PIP).” Accessed January 2023.