KRS 304.39: Kentucky Motor Vehicle Reparations Act

The Kentucky Motor Vehicle Reparations Act, codified at KRS 304.39, is the no-fault auto insurance law that governs every vehicle owner in the state. It requires you to carry personal injury protection (PIP) that pays your medical bills and lost wages after a crash no matter who caused it, sets the minimum liability coverage your policy must include, and restricts when you can sue the at-fault driver for pain and suffering. It also lets you opt out of the no-fault system entirely if you file the right paperwork before an accident happens.

What PIP Pays and Who It Covers

Every Kentucky auto policy must include basic reparation benefits of up to $10,000 per person, per accident. Those benefits cover three categories of economic loss: medical expenses, work loss, and replacement services loss. Medical expenses include hospital care, rehabilitation, ambulance transport, and other treatment, plus up to $1,000 toward funeral and burial costs if the injury causes death.¹

Work loss reimburses wages you miss while recovering, subject to a weekly cap set by statute. Replacement services cover reasonable costs for household tasks you can no longer do yourself, like cleaning or yard work. Everything draws from the same $10,000 pool, so heavy medical bills can exhaust the limit before your lost wages are fully paid.

The point of PIP is speed and certainty. Your own insurer pays once you submit reasonable proof of your losses. You do not have to prove the other driver was at fault, wait for a liability decision, or file suit.²

Coverage reaches beyond the person named on the policy. A spouse or relative living in the insured’s household qualifies, as does any minor in the custody of the insured or a household relative.¹ Passengers in the insured vehicle are covered by that vehicle’s policy. A pedestrian struck by a car receives PIP benefits from the insurance on the vehicle that hit them.²

Motorcycles are the big exception. Riders and their passengers do not receive PIP benefits unless optional PIP coverage was specifically purchased for the motorcycle or by the rider.³ Kentucky law only requires liability coverage on motorcycle policies, not PIP.⁴ A hurt motorcyclist without that add-on has to lean on private health insurance or a liability claim against the at-fault driver.

When You Can Sue the At-Fault Driver

The tradeoff for guaranteed PIP is a limit on your right to sue. KRS 304.39-060 partially abolishes tort liability for auto accidents. You cannot recover pain-and-suffering damages from the other driver unless your injuries cross at least one statutory threshold:⁵

Medical expenses for reasonably needed treatment exceeding $1,000. If you received free care through the military, VA, or a similar program, you can meet the threshold by showing the treatment had an equivalent value of at least $1,000.
A bone fracture, of any kind.
Permanent disfigurement, such as visible scarring.
Permanent injury or permanent loss of a body function, established within a reasonable degree of medical probability.
Death, which allows the estate to pursue a wrongful death claim.

Fall short of every threshold and you are limited to the economic benefits your PIP policy pays. No recovery for pain, suffering, mental anguish, or inconvenience. Insurance companies routinely move to dismiss claims that do not clear the bar, so consistent medical documentation from the start of treatment matters. A vague note about soreness will not prove a permanent injury months later.

Even after you clear a threshold, you can only recover non-economic damages through the lawsuit. The economic losses PIP pays cannot be recovered twice, because the statute abolishes tort liability to the extent PIP benefits are payable.⁶

Rejecting No-Fault Before an Accident

Kentucky is unusual in letting residents opt out of no-fault entirely. Under KRS 304.39-060(4), you can reject the system’s limits on your tort rights by filing a written rejection form with the Department of Insurance before any accident occurs.⁵ The form must state in bold print that accepting standard no-fault insurance limits your right to sue a negligent driver unless the injury thresholds are met. Once filed, the rejection stays on your record until you revoke it in writing.⁷

Rejection changes your position two ways. You are no longer subject to the $1,000 medical threshold or the injury-severity requirements, and you can sue an at-fault driver for any amount of damages from any injury. In exchange, you lose your right to PIP. Your insurer will not pay your medical bills or lost wages after an accident, whoever caused it, so you rely on health insurance or savings while a liability claim moves through the process.²

Two more consequences are worth weighing. If every member of your household rejects no-fault, your policy must still include guest PIP so passengers and pedestrians can still receive benefits. Your liability premiums may rise as well, because other drivers who reject no-fault gain the unrestricted right to sue you for any injury.² A rejector who wants the immediate-payment safety net without revoking the rejection can buy back basic PIP coverage under KRS 304.39-140(5).

Required Liability and Underinsured Motorist Coverage

Every vehicle owner must carry liability insurance to cover damages caused to others. KRS 304.39-110 offers two ways to comply:⁴

Split limits of at least $25,000 for bodily injury to one person, $50,000 for bodily injury to all persons in a single accident, and $25,000 for property damage. Often written as 25/50/25.
A single combined limit of at least $60,000 for all bodily injury and property damage from one accident.

The policy must cover accidents anywhere in the United States, its territories, and Canada. Motorcycle policies only have to meet the liability limits and are not required to include PIP.⁴ These figures are a legal floor. A $25,000 bodily injury limit disappears quickly in any crash involving an emergency room visit or surgery, so anyone with assets to protect should look at higher coverage.

Kentucky insurers must also make underinsured motorist (UIM) coverage available on request.⁸ An underinsured motorist is a driver whose liability coverage is less than the judgment you recover against them. If you win $100,000 against a driver carrying only the $25,000 minimum, UIM pays the gap up to your policy limit.

KRS 304.39-320 contains a procedural trap. Before accepting a settlement from the at-fault driver’s insurer that will not fully cover your claim, you must send written notice to your own UIM insurer by certified or registered mail. Your UIM carrier then has 30 days to consent to the settlement or preserve its subrogation rights by paying you the amount of the at-fault driver’s offer.⁸ Settling with the at-fault driver without giving that notice can destroy your UIM claim.

Deadlines That End Your Rights

Kentucky’s filing deadlines are some of the shortest in the country, and missing them ends your case.

Personal Injury Lawsuit: One Year

KRS 413.140 requires you to file a personal injury action within one year after the cause of action accrued.⁹ Many people assume they have two or three years and lose the right to sue by waiting.

PIP Benefits

If your insurer has paid no PIP benefits, you must file an action within two years after the loss and after you knew (or should have known) the accident caused it, or within four years of the accident, whichever comes first. If PIP benefits have been paid and you are seeking more, the deadline is two years from the last payment. Anyone under a legal disability when the claim accrues gets the period of disability excluded from the clock.¹⁰

Penalties for Driving Without Insurance

Penalties escalate quickly after the first offense.¹¹

First offense for a vehicle owner: a fine between $500 and $1,000, up to 90 days in jail, revocation of the vehicle’s registration, and license plate suspension for one year or until proof of insurance is provided. A judge may reduce penalties if you produce proof of coverage.
Second or later offense within five years for a vehicle owner: a fine between $1,000 and $2,500, up to 180 days in jail, and revocation of the owner’s driver’s license. Reduced penalties require proof of insurance plus a receipt showing a six-month premium has been paid.
Operators driving someone else’s uninsured vehicle: the same fine and jail ranges apply. If you both own and operate the uninsured vehicle, penalties under both the owner and operator provisions stack.

1
Justia. Kentucky Code 304.39-020 – Definitions for Subtitle
2
Kentucky Department of Insurance. No Fault Rejection/Verification (PIP)
3
Kentucky General Assembly. Kentucky Code 304.39-040 – Obligation to Pay Basic Reparation Benefits
4
Justia. Kentucky Code 304.39-110 – Required Minimum Tort Liability Insurance
5
Justia. Kentucky Code 304.39-060 – Acceptance or Rejection of Partial Abolition of Tort Liability – Exceptions
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Kentucky Legislative Research Commission. Kentucky Code 304.39-060 – Acceptance or Rejection of Partial Abolition of Tort Liability – Exceptions
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Kentucky Department of Insurance. Kentucky No-Fault Rejection Form
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Justia. Kentucky Code 304.39-320 – Underinsured Motorist Coverage – Effect of Settlement of Claims
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Kentucky Legislative Research Commission. Kentucky Code 413.140 – Actions to Be Brought Within One Year
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Kentucky Legislative Research Commission. Kentucky Code 304.39-230 – Limitations of Actions
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Kentucky Legislative Research Commission. Kentucky Code 304.99-060 – Penalties for Violation of Subtitle 39