Definition of No-fault Insurance

• No-fault insurance coverage provides payments for medical expenses and lost wages directly related to the accident. The amount of the payment is based on the terms of the policy. It does not matter who was at fault. No-fault insurance is also known as Personal Injury Protection (PIP), Basic Reparation Benefits (BRB) or Optional Basic Economic Loss (OBEL) in other states. In addition to the medical payments, no-fault coverage also includes the replacement or repair of the damaged vehicle. The payments are made by the insurance company that insured the vehicle in which you were a passenger or the driver. Under the full coverage insurance offered in most states, the driver at fault in the accident is responsible for all related reparations. PIP coverage will pay your medical bills until you reach the coverage limit. Once the responsible driver's insurance company settles, your insurance company must be reimbursed the PIP sums expended on your behalf.
  
  

Coverage Amounts

• According to the Kentucky Driver's Manual, residents must have a minimum of $25,000/$50,000 in liability coverage for injuries resulting from an accident and $10,000 for property damage. A vehicle owner may purchase a single limit policy with a liability of at least $60,000. The Driver's Manual also states that "liability insurance policies must provide a minimum of $10,000 no-fault personal-injury coverage."
  
  

No-fault Insurance Limitations

• If an individual sustains minor injuries, his right to file a lawsuit in a no-fault state is limited. According to an article published by the Crocker Law Offices, if you are insured with the standard $10,000 no-fault insurance coverage, you can file suit if your medical expenses or lost wages exceed $10,000. The article states that, "those damages (losses) are part of your liability claim along with other damages not covered by PIP, such as pain and suffering, future medical expenses, and future impairment of your ability to work."
  
  

Uninsured Drivers

• If an uninsured driver is involved in a motor vehicle accident, he will be required to pay the accident-related expenses himself. If a judgment for accident-related damages is entered against him, his driver's license will be suspended for 15 years or until the judgment has been satisfied.
  
  

Fraud

• Under Title 16, Chapter 187.990, choosing to forge or sign evidence of proof of financial responsibility without actually having insurance can lead to a fine of up to $1,000, imprisonment of up to a year or both. Any party who suspects the proof of financial responsibility is a forgery or false but permits its filing can face the same penalties.