Under Kentucky law, all drivers are required to have car insurance.  There are multiple types of car insurances and each one operates for specific purposes. There is a required minimum amount of coverage a driver must carry, but frequently motorists will want to buy coverage far in excess of the state required minimums. Understanding the basics is a good starting point for buying coverage and also communicating with your attorney during the claims process.  

Drivers have a few options of either mandatory or optional coverage, when deciding which coverage is best for them.  This is a quick introduction to the basic coverages and terms you might encounter when purchasing insurance or making a claim. Please review below to familiarize yourself with Personal Injury Protection, Bodily Injury coverage, Property damage coverage, Under-Insured Motorist/ Uninsured Motorists, and Collision coverage. Prior to purchasing insurance, please have a full and complete conversation with your insurance agent and rely on their advice for the best options for your specific insurance needs. This explanation is specifically brief and is not intended as legal advice. 

PIP (Personal Injury Protection)

PIP, or Personal Injury Protection, pays for medical expenses and lost wages when someone is injured in an accident either in a vehicle or as a pedestrian. PIP coverage can also be called “No Fault Insurance” because the payments must be made up to the PIP policy limit regardless of who was at fault for the car wreck. Kentucky requires that all insurance policies have a minimum $10,000 PIP coverage -unless the car owner opts-out and signs a form rejecting this coverage… which we do not recommend. $10,000 is the minimum level that the policies are required to have, but you can purchase more PIP coverage, depending on what policy limit you desire. 

PIP works like this:  you are driving through an intersection and a driver runs a red light and collides with you. You suffer a minor concussion and need medical treatment. Regardless of the fact that the other driver was clearly at-fault for causing the wreck, your own PIP coverage pays the first $10,000 in combined medical expenses and lost wages up to $10,000. Medical bills and lost wages in excess of the $10,000 PIP policy, and all of the pain and suffering damages associated with the wreck are owed by the at-fault driver’s Bodily Injury policy up to the policy limit amount. Damages in excess of the policy limit amount can be owed by the at-fault driver personally.   

Bodily Injury and Property Damage Liability

When someone causes a car wreck, their Bodily Injury coverage and Property Damage coverage pays for the damages caused by the at-fault driver for injuries and/or property damage caused to the not-at-fault parties in the wreck. At minimum, Kentucky requires liability coverage of the following:

• $25,000 Bodily Injury limits per person and $50,000 limits per incident

• $25,000 limits for property damages

For example, imagine someone is driving and not paying attention. They then rear-end another vehicle, causing the other driver to suffer a neck injury and damage to their car. The bodily injury liability coverage will pay for their medical bills, lost wages and pain and suffering (up to $25,000 per person, $50,000 per accident,) and the at-fault driver’s property liability policy will pay for the car repairs or replacement to the not-a-fault driver’s vehicle, up to the $25,000 limit. If damages caused by the wreck are in excess of these limits, then the at-fault driver may have to pay out of pocket to cover the excess damages.

Underinsured (UIM) & Uninsured (UM) Motorist Protection 

Unfortunately, sometimes people are involved in an accident where the at-fault driver either has no insurance at all or not enough insurance to cover all of the damage caused. Kentucky requires UM/UIM coverage to be offered, but this coverage is not mandatory, but we highly recommended purchasing this. When the other driver is at-fault and is unable to cover your losses, you can rely on the UM/UIM coverage in your policy. If you have UM/UIM coverage, your own insurance company stands in the place of the at-fault driver to cover additional damages in excess of the insurance available from the at-fault driver’s policy, or lack there of. 

Collision 

Collision coverage comes into play when your vehicle suffers physical damage from collision with another object. This coverage is typically optional but may be required for a rental or a leased car. The coverage is also subject to the deductible that you decide on. For example, you are driving on a slick road and skid into a guardrail, causing significant damage to your car. Since this was a single-car accident and no other vehicle was involved, your collision coverage would pay for the repairs to your vehicle, minus the deductible you've chosen for your policy. If you had rented the car, the same coverage might be required as part of the rental agreement. Frequently, if liability is disputed in a wreck, the parties will get their property damage paid for through their own carriers while a determination is made regarding who was at fault. Frequently, Collision Coverage is referred to as “full-coverage” although this term is not perfectly accurate in our opinion.