Kentucky Auto Insurance Is About to Change:
The 2026 PIP Reforms
House Bill 627 restructures how PIP medical bills are paid, raises weekly wage loss to $500, and gives the Attorney General new fraud enforcement powers.
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Kentucky House Bill 627 passed the General Assembly with bipartisan support (85-9 in the House, 24-8 in the Senate) and was delivered to Governor Andy Beshear on April 1, 2026. Under KRS 446.170, the law is expected to take effect approximately 90 days after the 2026 session adjourns, around mid-July 2026, and applies to policies issued or renewed on or after that date. The bill ties PIP medical billing to the Kentucky Workers’ Compensation Fee Schedule, raises weekly wage loss payments from $200 to $500, increases the funeral benefit from $1,000 to $5,000, and prohibits providers from balance billing patients for PIP claims.
Where HB 627 Stands Right Now
As of early April 2026, HB 627 has been delivered to Governor Beshear but has not yet been signed into law. The Governor has 10 days (excluding Sundays) to sign, veto, or allow the bill to become law without his signature.
If Governor Beshear vetoes the bill, the legislature returns for the final days of the 2026 session and can override with a majority of the full membership of each chamber. The House voted 75-14 on concurrence and the Senate voted 24-8 on passage. Both margins clear the override threshold. The law is coming regardless of what the Governor does.
What this means for you: Begin checking your policy renewal date now. If your policy renews after mid-July 2026, the new PIP rules apply to your coverage.
How HB 627 Moved Through the Legislature
Key Changes at a Glance
| Before HB 627 | After HB 627 |
|---|---|
| Medical Billing Standard Whatever the provider bills is “presumed reasonable” regardless of amount | Medical Billing Standard Workers’ Comp Fee Schedule rate — providers can only collect what the schedule allows |
| Weekly Wage Loss Up to $200 per week | Weekly Wage Loss Up to $500 per week — a 150% increase |
| Funeral Benefit Up to $1,000 | Funeral Benefit Up to $5,000 — a 400% increase |
| Balance Billing Providers could bill the patient for any amount above what PIP paid | Balance Billing Prohibited. Providers cannot bill the patient for the difference or report unpaid balances to credit bureaus |
| Out-of-State Providers Could bill at any rate; no obligation to follow Kentucky standards | Out-of-State Providers Cincinnati, Nashville, and other regional providers treating Kentucky accident victims must comply with the fee schedule |
| Fraud Enforcement Kentucky Department of Insurance handled PIP fraud investigations | Fraud Enforcement Attorney General gains concurrent jurisdiction to investigate and prosecute PIP fraud under KRS 304.47-020 |
How PIP Works Under Kentucky’s Motor Vehicle Reparations Act
Kentucky is a no-fault state. Under the Motor Vehicle Reparations Act (KRS Chapter 304.39), every driver’s own auto policy pays for their medical bills and lost wages after an accident, regardless of who caused the crash. That coverage is Personal Injury Protection, or PIP.
Under the current law, PIP medical expenses are reimbursed at whatever the provider bills. KRS 304.39-020 presumes every submitted bill is a “reasonable charge,” which has allowed providers to bill at rates far above what private insurers or Medicare would pay. HB 627 ends that presumption.
You can still reject PIP coverage under KRS 304.39-060, but opting out means forfeiting the new $500 wage loss benefit and the balance billing protection. Given those upgrades, talk to an attorney before removing PIP from your policy.
The Fee Schedule Reform: What It Actually Means
The centerpiece of HB 627 is tying PIP medical reimbursement to the Kentucky Workers’ Compensation Fee Schedule under KRS 342.035. This is the same rate schedule Kentucky uses for workplace injury claims.
What it changes for patients: nothing about which doctors you can see. HB 627 does not restrict your choice of providers. The shift is on the billing side. Your insurer reimburses your chosen provider at the standardized schedule rate rather than at the provider’s retail rate. The provider collects the schedule amount from your insurer and cannot bill you for the remainder.
What it changes for insurers and providers: PIP medical payments become predictable. The Kentucky Department of Insurance and bill sponsors have projected that capping reimbursement at fee schedule rates will reduce overall PIP claim costs, which proponents argue should create downward pressure on auto insurance premiums over time.
The Senate Committee Substitute to HB 627 removed the original 180-day billing submission limit. The final law retains the existing standard: insurers must pay or deny a PIP claim within 30 days of receiving reasonable proof of loss.
One thing HB 627 clarifies: The fee schedule applies to out-of-state providers treating Kentucky accident victims. If you see a Cincinnati or Nashville doctor after a Kentucky crash, their PIP reimbursement follows Kentucky’s fee schedule, not their local rates.
Wage Loss and Funeral Benefits: The Numbers
The original KRS 304.39-130 capped wage loss payments at $200 per week. That figure has not kept pace with wages. According to the Kentucky Department of Workers’ Claims, the 2026 average weekly wage for the state is $976.47. A $200 cap covers less than 21% of that average.
HB 627 raises the cap to $500 per week, covering roughly 51% of the state average weekly wage. It is still a cap, not full wage replacement, but it is a material improvement for injured workers who miss time from their jobs after a crash.
The funeral benefit increases from $1,000 to $5,000. The original $1,000 figure dates to the 1970s and has not been updated since. The National Funeral Directors Association reports the median cost of a funeral with burial in the United States is approximately $8,300. The new $5,000 benefit, while still not covering full costs, is a significant step toward a realistic reimbursement amount for families.
“I was one of those people who felt injury lawyers were not necessary if it was 100% the other party’s fault. I was so wrong. They received over five times the amount initially offered and got the medical bills covered. Lesson learned. Insurance companies don’t want to be reasonable anymore.”
— Jill M.
The Balance Billing Prohibition
One of the most consumer-friendly additions in HB 627 is the balance billing ban. Under the old law, if a provider charged $2,000 for a procedure and PIP paid $800, the provider could send the remaining $1,200 to the patient. That bill could end up in collections or on a credit report.
HB 627 prohibits that. Once a provider submits a PIP claim and receives payment at the fee schedule rate, they cannot:
- Bill the patient for the difference between their charged rate and the fee schedule rate
- Report an unpaid balance to a credit bureau for any amount covered by PIP
- Pursue the patient in collections for PIP-covered services
The prohibition applies to both in-state and out-of-state providers treating Kentucky accident victims. A Cincinnati hospital that treats a Kentucky driver injured in a Kentucky accident must accept the fee schedule rate as payment in full for PIP-covered services.
Attorney General Fraud Enforcement
HB 627 creates a new section of KRS Chapter 15 granting the Kentucky Attorney General concurrent jurisdiction to investigate and prosecute offenses under KRS 304.47-020, Kentucky’s insurance fraud statute. Previously, PIP fraud investigations ran primarily through the Department of Insurance.
The bill also requires the Commissioner of Insurance to publish an annual insurance fraud report. The report requirement creates public accountability and a data trail for tracking whether PIP fraud declines as the fee schedule removes financial incentives for inflated billing.
What to Do Before HB 627 Takes Effect
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Find your policy renewal date
HB 627 applies to policies issued or renewed on or after the effective date, expected around mid-July 2026. Call your insurer or log into your account to confirm when your current policy term ends.
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Review whether you have PIP on your policy
If you previously rejected PIP under KRS 304.39-060, you are not covered by any of these changes. The new $500 wage loss benefit and the balance billing protection only apply to policies that include PIP coverage.
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Understand your providers’ billing obligations
After the effective date, providers treating you for a crash injury must accept the fee schedule rate as payment in full for PIP claims. If a provider attempts to balance bill you for PIP-covered services after your policy has renewed, that is a violation of the new law.
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Confirm whether the new law applies to your accident
If you were injured before the effective date, the old billing standards and the $200 wage loss cap still govern your claim, even if your policy renews after the date. The governing rules depend on your policy’s issuance or renewal date, not your accident date.
What HB 627 Does Not Change
The No-Fault Framework Stays in Place
Kentucky remains a no-fault state. Your own PIP coverage still pays your medical bills and wage loss first, regardless of fault. The tort threshold for stepping outside the no-fault system remains unchanged under KRS 304.39-060. Your right to bring a lawsuit against an at-fault driver for serious injuries above the threshold is unaffected by HB 627.
Your choice of doctors is also unaffected. HB 627 changes what insurers pay, not who you can see. If you prefer a specific provider or physician of your choosing, you can still see that person. The fee schedule controls their reimbursement from the insurer, not your access to care.
Frequently Asked Questions
When does Kentucky HB 627 take effect?
Under KRS 446.170, bills without an emergency designation take effect 90 days after the 2026 legislative session adjourns. The 2026 regular session is expected to conclude in mid-April, placing the effective date around mid-July 2026. HB 627’s new PIP rules apply to auto insurance policies issued or renewed on or after that date.
What if my accident happened before HB 627 took effect?
Your policy’s issuance or renewal date, not your accident date, determines which rules apply. If your policy was in force before the effective date and has not yet renewed, the old billing standard and the $200 wage loss cap govern your claim. Once your policy renews after the effective date, the new standards apply going forward.
Will HB 627 lower my car insurance premiums?
Proponents, including the Kentucky Department of Insurance and the Insurance Institute of Kentucky, project that tying PIP claims to the Workers’ Comp fee schedule will reduce inflated billing and lower overall PIP claim costs over time. How quickly those savings reach individual policyholders depends on each insurer’s rate filing process and the Department of Insurance’s review timeline.
Can I still choose my own doctors after the reform?
Yes. HB 627 does not restrict your choice of medical providers. The change is on the billing side: your insurance company reimburses your chosen provider at the standardized Workers’ Compensation Fee Schedule rate rather than at the provider’s retail rate. The provider cannot bill you for the difference.
Was the 180-day billing deadline included in the final bill?
No. The Senate Committee Substitute to HB 627 deleted the strict 180-day billing submission requirement that appeared in the original House version. The final enrolled version relies on the existing standard: insurers must pay or deny a PIP claim within 30 days of receiving reasonable proof of loss, per KRS 304.39-210.
Can I still reject PIP coverage after HB 627?
Yes. You can still formally reject PIP coverage in writing under KRS 304.39-060. However, rejecting PIP means forfeiting the new $500 wage loss benefit, the $5,000 funeral benefit, and the balance billing protection. Given those improvements, speak with an attorney before removing PIP from your policy.
Does the fee schedule apply to hospital emergency departments?
Hospital services were heavily debated during the legislative process. The final enrolled version of HB 627 subjects PIP medical expenses to the Workers’ Comp fee schedule, which includes hospital facility rates. The precise application to complex ER billing scenarios may require regulatory guidance from the Kentucky Department of Insurance. An attorney can review how the law applies to your specific claim.