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. 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 the 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 injury. No-fault states vary in that the threshold may be expressed in verbal terms (a descriptive or verbal threshold) or in dollar amounts of medical bills, a monetary threshold. Some laws also include minimum requirements for the days of disability incurred as a result of the accident.
Kentucky, as well as 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 Insurance Code section of the Kentucky revised code. In section 304.39-060 of the KRS it states in subsection 2(b) that:
In any action of tort brought against the owner, registrant, operator or occupant of a motor vehicle with respect to which security has been provided as required in this subtitle, or against any person or organization legally responsible for his acts or omissions, a plaintiff may recover damages in tort for pain, suffering, mental anguish and inconvenience because of bodily injury, sickness or disease arising out of the ownership, maintenance, operation or use of such motor vehicle only in the event that the benefits which are payable for such injury as "medical expense" or which would be payable but for any exclusion or deductible authorized by this subtitle exceed one thousand dollars ($1,000), or the injury or disease consists in whole or in part of permanent disfigurement, a fracture to a bone, a compound, comminuted, displaced or compressed fracture, loss of a body member, permanent injury within reasonable medical probability, permanent loss of bodily function 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 a showing that the medical treatment received has an equivalent value of at least one thousand dollars ($1,000).
Subsection c notes that tort liability is not so limited for injury to a person who is not an owner, operator, maintainer or user of a motor vehicle within subsection (1) of this section, 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 as a Kentucky motorist reject no-fault you can expect to pay a higher premium, however you are unrestricted in their 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.
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