Enacted in 1975, Kentucky's Motor Vehicle Reparations Act, KRS 304.39 (sometimes referred to as the No-Fault Law) has two components: personal injury protection (PIP) coverage and limitations on an individual’s right to sue and be sued (tort rights).
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 which 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.
Limitations on an individual’s rights to sue and be sued (tort rights).
All people who register, operate, maintain or use a motor vehicle in Kentucky are 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 KRS 304.39-060.
Rejection of the limitation on one’s tort rights.
Each individual may reject the limitations on his/her tort rights. The rejection must be in writing on a special form and must be filed with the Department of Insurance before it is effective. The rejection will remain in effect until the department is notified in writing of any change KRS 304.39-060.
If all members of a household reject the limitations on their rights to sue and be sued, 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 rejector for injuries which do not reach the thresholds KRS 304.39-060(8).
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 KRS 304.39-140(5).
Basic PIP coverage is optional for motorcycles. Unless basic PIP coverage is purchased for the motorcycle, neither the operator nor the passenger of the motorcycle is entitled to collect basic PIP benefits from any source KRS 304.39-040. If a motorcycle owner elects not to purchase basic PIP coverage, he/she is still considered to have accepted the limitations on his rights to sue and be sued for damages unless a no-fault rejection form is filed. If a no-fault rejection form is not filed, he/she will be unable to recover the first $10,000 of a motorcycle injury claim from the at-fault party.
Verification of No-Fault Rejection
The Department of Insurance can respond to written requests for verification of an individual's no-fault rejection status. Such requests should be submitted on the form listed below and accompanied by a $5 fee.
Kentucky Assigned Claims Plan
An injured person would file a claim for basic PIP benefits with the insurer for the vehicle they were occupying at the time of the accident, or the vehicle they were struck by if a pedestrian. If there is no insurance on that vehicle, the injured person can recover basic PIP from his/her policy or a policy issued to a member of his/her household. If there is no other policy available, a claim for basic PIP should be made to the Kentucky Assigned Claims Plan. A vehicle owner who does not have insurance is not entitled to collect basic PIP benefits from any source KRS 304.39-160 and 304.39-170.
Kentucky Insurance Arbitration Association
All insurers, self-insureds or obligated governments providing basic or added reparation benefits are members of and can utilize the Kentucky Insurance Arbitration Association to resolve subrogation disputes KRS 304.39-290.