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Kentucky Auto Insurance Requirements

The Commonwealth of Kentucky requires its drivers to maintain financial responsibility for any injuries or damages caused in an accident. To meet Kentucky’s requirements, drivers must carry auto insurance coverages that meet the state’s minimum requirements and maintain the coverage without interruption to avoid penalties and fines.

Liability Coverage

Kentucky is a no-fault state that requires its drivers to maintain bodily injury liability and property damage liability coverages in order to comply with the insurance laws. These coverages insure the other party from injuries and damages caused by the policyholders’ negligence. Kentucky drivers must carry bodily injury liability limits that are no less than $25,000 per person and $50,000 per accident with property damage limits no less than $10,000. Some Kentucky insurance carriers offer combined single limit coverage, which combines the liability limits into one liability amount. The minimum single limit coverage is $60,000.

Personal Injury Protection

As a no-fault state, Kentucky also requires its drivers to maintain personal injury protection (PIP) which provides coverage up to $10,000. This coverage reimburses the policyholder and accompanying passengers for medical expenses, lost wages and other out-of-pocket expenses that result from the vehicle accident. Personal injury protection pays regardless, and reimbursements can be issued before the accident investigation is complete.

Personal injury protection restricts the policyholder’s right to sue the negligent party for damages. As a result, Kentucky allows drivers to reject this coverage and maintain their full rights to litigate against the negligent party. To do so, the driver must reject the coverage in writing and the written rejection must be filed with Kentucky’s Department of Insurance.


The Kentucky Department of Insurance and the Department of Motor Vehicle Regulations require Kentucky auto insurance carriers to report the status of their policies to the Department of Motor Vehicles. The status report includes each policyholder’s policy number, insured vehicles with the applicable vehicle identification numbers, as well as the policy inception and cancellation dates. If a policy is cancelled, the insurance carrier sends the cancellation electronically to the state. These cancellation notices are issued regardless of the cancellation reason and include cancels for nonpayment, nonrenewal and if the policyholder requests it.

Drivers that fail to comply with Kentucky’s financial responsibility requirements are immediately subject to fines and penalties. The noncompliant driver’s vehicle registration can be immediately revoked and his license suspended. Noncompliant drivers that are found driving while suspended are also subject to fines up to $1,000 per incident and 90 days in jail. A lapse in insurance coverage, as well as suspensions and noncompliance, can result in an increased insurance premium in addition to the cancellation of the insurance policy.

Kentucky Automobile Insurance Plan (KAIP)

To ensure all Kentucky drivers have the opportunity to comply with the state’s financial responsibility requirements, the state offers the Kentucky Automobile Insurance Plan. This plan is designed for high-risk drivers that have been denied auto insurance coverage because of their driving history among other reasons. Every auto insurance carrier that conducts business in Kentucky is required to participate in this plan. Drivers that secure coverage under the Kentucky Automobile Insurance Plan are placed with one of these participating carriers. Although the policy premiums are generally higher than when obtained outside this program, drivers are guaranteed to receive an insurance policy. These policies only offer the coverages required by the Commonwealth of Kentucky and do not include options for comprehensive and collision coverage.