Is Kentucky a No-Fault State?

Kentucky is a choice no-fault state. Under KRS 304.39-060, every driver is part of the no-fault system with Personal Injury Protection (PIP) benefits unless that driver files a written rejection. A driver who rejects PIP loses the coverage that pays medical bills and lost wages through the driver’s own auto policy regardless of who caused the crash.

PIP Coverage in Kentucky

PIP, called basic reparation benefits in KRS 304.39-020, is first-party auto insurance: it pays the injured person directly, and no one has to prove the other driver was at fault. The basic limit is $10,000 per person per accident. According to the Kentucky Department of Insurance, basic PIP is paid by the insurer of the vehicle the injured person was riding in, or the vehicle that struck a pedestrian.

That $10,000 covers four kinds of loss:

• Medical expenses, including emergency room visits, hospital stays, surgery, imaging, prescriptions, ambulance transport, physical therapy, chiropractic care, and follow-up treatment. Basic PIP medical benefits carry no deductible and no copay.
• Work loss, meaning income the injured person would have earned.
• Replacement services, meaning the cost of hiring someone for household tasks the injured person cannot do, such as cooking, cleaning, childcare, or lawn care.
• Funeral, cremation, and burial expenses, and survivor losses when a crash causes death.

No-Fault Rejection Process

A Kentucky driver rejects no-fault by filing the official Kentucky No-Fault Rejection Form with the Department of Insurance, under KRS 304.39-060 and 806 KAR 39:030. The rejection must be in writing on that form and is not effective until the Department has it on file. A verbal request to an agent, a phone call to an insurer, or a checkmark on a generic form does not reject no-fault.

The rejection stays in effect until the driver notifies the Department in writing of a change. It does not expire at renewal and does not reset when the driver switches carriers, so a rejection filed 10 years ago and never revoked still leaves that driver without PIP today.

Effects of Rejecting No-Fault

Rejecting no-fault changes two things at once. The driver loses PIP benefits, so the auto policy no longer pays medical bills, lost wages, replacement services, or funeral costs through PIP. The driver also gains full tort rights: without no-fault limits, the driver can sue the at-fault driver for any injury.

Under the no-fault system, a person cannot sue for pain and suffering unless the injury clears a threshold in KRS 304.39-060: more than $1,000 in medical expenses, a broken bone, permanent disfigurement, permanent injury, or death. Rejection removes those thresholds for the rejecting driver.

Liability Premiums and Lawsuit Exposure

Rejection also removes the thresholds that protect the rejecting driver from lawsuits. The Kentucky Department of Insurance warns that “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.” Anyone the rejecting driver injures can sue for any injury, which raises the chance that the driver’s liability limits are tested. Any premium savings from dropping PIP can be offset by that higher liability premium.

Delayed Payment Under Full Tort Rights

A lawsuit takes time. A straightforward car accident case can take months to resolve, and contested cases can take a year or more, with no first-party coverage paying medical bills or replacing lost income in the meantime. PIP pays while the injured person is recovering, without a fault decision or a settlement.

Tort cases also depend on the other driver having insurance or assets. The Insurance Information Institute estimates that 14.1% of Kentucky drivers are uninsured. A crash with an uninsured driver gives the rejecting driver the right to sue someone who may have nothing to pay.

Single-Vehicle Crash Coverage

PIP covers crashes involving a motor vehicle even when no other vehicle is involved, such as losing control on a wet road, hitting a deer, or swerving into a guardrail. A driver without PIP has no auto insurance coverage for injuries in those crashes. Health insurance may cover some medical costs, with deductibles, copays, out-of-network charges, and no coverage for lost income.

Medical Costs After a Crash

Medical bills from a crash start before fault is resolved. The Agency for Healthcare Research and Quality (AHRQ) reports that the average cost of a treat-and-release emergency department visit in the United States was $1,646 in 2021, for a visit where the patient goes home the same day.

With PIP, the first $10,000 of covered loss is paid by the injured person’s own policy with no deductible and no copay. Without PIP, the injured person carries those bills until another insurer or a lawsuit pays. The rest of a not-at-fault claim is covered in the firm’s article on car accidents that were not the injured driver’s fault.

Kentucky drivers can also buy added PIP coverage above the $10,000 basic limit, up to $50,000.

Guest PIP for Households That Reject No-Fault

When every member of a household rejects no-fault, the policy must still include guest PIP coverage. Guest PIP provides basic benefits to passengers in the vehicle and to pedestrians, even though the household members themselves have no PIP coverage. The household pays for PIP that protects other people in or around its vehicle but not its own members, a result many drivers who reject PIP do not expect.

HB 627 PIP Changes in 2026

Kentucky House Bill 627, enrolled as 2026 Ky. Acts ch. 149, raised PIP benefits for policies issued or renewed on or after July 15, 2026. The weekly cap on work loss and replacement services rose from $200 to $500, and the funeral, cremation, and burial benefit rose from $1,000 to $5,000.

HB 627 also ties medical billing on PIP claims to the Kentucky Workers’ Compensation Fee Schedule, so providers treating crash injuries must accept the fee schedule rate as payment in full, and it ends balance billing on PIP claims. Both changes stretch the $10,000 basic limit further, and a driver who rejects PIP gives up all of them. The firm’s article on directing PIP benefits explains how to assign payments under the new law.

Reinstating PIP After Rejection

A driver who rejected no-fault can reverse that decision at any time by notifying the Kentucky Department of Insurance in writing, and the Department notes that a person who rejected can buy back basic PIP coverage under KRS 304.39-140(5). Reinstated PIP applies only to crashes that happen after the coverage is back in effect. It does not reach back to a crash that happened while the rejection was on file.

At reinstatement, the driver should get an updated declarations page and confirm in writing that basic reparation benefits are listed and that the rejection has been removed from the Department’s file. Added PIP can raise limits from the $10,000 minimum to $20,000, $30,000, or $50,000. Uninsured and underinsured motorist coverage need the same review, and the firm explains why rejecting uninsured motorist coverage in Kentucky is costly.

Common Reasons Drivers Reject PIP

Drivers commonly give four reasons for rejecting PIP, and each leaves a coverage gap.

Existing Health Insurance

Health insurance covers medical treatment but not lost wages, replacement services, or funeral costs, and it carries deductibles, copays, out-of-network restrictions, and case disputes. A health insurer that pays crash-related bills will typically assert a subrogation lien against any recovery from the at-fault driver, so it is repaid before the injured person receives anything. PIP benefits are first-party benefits the policyholder paid for.

Unrestricted Right to Sue

Rejecting no-fault removes the tort thresholds, which is the most common legal argument for rejection. In practice, the thresholds are not hard to meet: a single emergency room visit can pass $1,000 in medical expenses, and a broken bone meets the threshold by definition. Most car accident injury cases in Kentucky meet at least one threshold, so trading $10,000 or more in no-fault benefits for tort rights the driver would likely have anyway rarely pays off.

Insurance Agent Premium Advice

Some agents present the rejection form as a way to lower the premium. The savings from dropping PIP are small and can be offset by a higher liability premium. An agent who suggested rejection without explaining the loss of $10,000 in first-party benefits, the added lawsuit exposure, and the loss of immediate coverage left out the consequences.

Clean Driving Record

PIP pays regardless of fault, whether the policyholder caused the crash, the other driver caused it, or a deer ran into the road. A clean driving record does not change when or whether PIP is needed.

Checking PIP Status on a Policy

The auto insurance declarations page shows whether PIP is in force: it should list “Personal Injury Protection” or “Basic Reparation Benefits.” If PIP is missing or shows as “Rejected,” the policyholder can contact the agent and the Department of Insurance to reinstate it. Drivers carrying only the $10,000 minimum can ask about added PIP. More on how PIP interacts with other coverage is on the firm’s no-fault insurance claims page.