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Kentucky’s auto insurance laws are often the subject of confusion for newcomers and natives alike. Much of the confusion comes from our complicated injury insurance statutes that have some, but not all, motorists joining the so-called “no fault” system.

Though the law can make it sound as if some Bluegrass State drivers can only be at fault for accidents if they choose to be, that is not the rule Kentuckians live by.

PIP often keeps Kentucky fender-benders simple

Every Kentucky car owner or driver must buy the basic Personal Injury Protection (PIP) insurance, which covers at least some of the costs of their personal injuries.

Under that coverage, each driver’s insurance company covers its own customer’s medical bills stemming from an accident, up to the limits of the policy. You can even pay more to cover yourself at higher limits than the standard PIP policy. The policy also covers passengers or pedestrians hurt by the policyholder.

A no-fault rule for those who don’t opt out

Unless the policyholder “opted out” of the no-fault system, it typically doesn’t even matter if the PIP policyholder or “the other guy” was at fault. Kentucky allows no legal action against the policyholder, if the accident was minor enough. This is the origin of the confusing “no-fault” concept.

The system tends to keep minor accidents and minor injuries relatively conflict-free.

Severe limits keep “fault” important in Kentucky

What if the accident is not minor enough? If an accident causes another person over $1,000 in medical expenses or certain kinds of serious injuries or death, even a so-called “no-fault” driver can be the target of a claim.

Also, if a Kentucky car owner “opts out” of a no-fault PIP policy, they can be sued (and can also sue) for damages.

Note that beyond PIP, all Kentucky car owners or drivers must also carry other coverage. It is for other bodily injuries and property damage they may be responsible for, potentially covering $60,000 for certain combinations of damage. Fault matters in an accident calling for that coverage in Kentucky.