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How Does Kentucky’s No-Fault Car Insurance Work After an Accident?

Wilson & McQueen, PLLC Oct. 13, 2022

No-fault car insurance laws are an arrangement in many states where a driver involved in a car accident files a claim with their own insurance company after an accident, no matter who was at fault. This arrangement involves Personal Injury Protection (PIP), which provides the driver with compensation for medical bills, lost income and other financial losses due to the accident.

How Does No-Fault Car Insurance Work?

No-fault laws are designed to protect a driver from a limited amount of liability if they are at fault for a car accident. It also speeds up the process of paying out claims, because there are no protracted court battles determining who was more at fault before claims are paid.

In short, the no-fault arrangement protects all drivers from lawsuits, unless a minimum financial and/or injury threshold is met and vice versa, also known as a “tort threshold.”

Compensation for vehicle damage

The no-fault system does not apply to vehicle damage claims, only injuries. You may sue the driver at fault for compensation to have your damaged vehicle repaired or replaced.

What is covered under Personal Injury Protection

The PIP feature of no-fault insurance pays up to $10,000 to cover medical bills, lost wages while recovering from injuries and other out-of-pocket expenses associated with the accident. You have the option of purchasing a higher level of PIP when you enroll in your car insurance, if you believe your circumstances will require it.

The PIP also covers injuries suffered by passengers in the car at the time of the accident as well as injuries suffered by pedestrians and cyclists.

PIP does not apply to motorcyclists.

Opting out Of No-Fault Insurance

Kentucky allows drivers to opt out of the no-fault car insurance plan when it comes time to select car insurance, but this option is risky. If you opt out and are involved in a shared-fault car accident, there’s no PIP safety net to help you. And if you are judged to be fully at fault for a car accident, you risk being sued for vast sums of money with no insurance assistance.

Note: When opting out of no-fault insurance, you still need to purchase “guest PIP” coverage for passengers or pedestrians injured in an accident that you’re involved in.

Liability Insurance

No matter your situation, you must have liability car insurance in Kentucky, to cover damages to other vehicles and injuries sustained by others if you’re at fault in a car accident.

No-fault laws and their application can be confusing and vary depending on the severity of the accident. If you’re unsure about your rights to compensation, or protection, after an accident, consult an attorney.