Kentucky Adjuster Insurance Exam 2026

What This License Is

A Kentucky adjuster license is issued by the Kentucky Department of Insurance under KRS Subtitle 304.9, with the licensing mechanics in 806 KAR 9:025 and the conduct restrictions in 806 KAR 9:030.

Kentucky recognizes three adjuster license types plus an apprentice credential. Independent adjusters work for insurers on contract. Staff adjusters are the insurer's own employees — and Kentucky licenses them, which most states do not. Public adjusters work for the insured. There is also a 12-month, nonrenewable apprentice adjuster license under KRS 304.9-432, and adjuster licenses may be held by business entities.

Lines of authority — KRS 304.9-430(7). Independent and staff adjusters may qualify in *"(a) Property and casualty; (b) Workers' compensation; or (c) Crop."* Public adjusters, under subsection (9), get property and casualty and crop only — they cannot hold the workers' compensation line. Each line carries its own separate 50-item examination.

Workers' compensation is a line of authority, not a separate credential. You do not register with the Department of Workers' Claims to adjust comp claims; you add the line to your insurance adjuster license and sit the workers' compensation adjuster examination.

What the license does not require: no prelicensing education, no fingerprints, no insurer appointment, and no Kentucky office or residence — though an *apprentice* license does require Kentucky residency and an in-state address.

Public Adjusters — and the Two-Year Freeze

Kentucky is not issuing new public adjuster licenses. 2026 Ky. Acts ch. 141 § 2 amended KRS 304.9-430(1)(b): for two years beginning April 13, 2026, *"An application for a public adjuster license shall not be accepted or approved by the commissioner,"* and *"The department shall not issue public adjuster licenses."* The section carried an emergency clause, so it took effect the day the Governor signed it.

Two narrow carve-outs. Under subsection (1)(c), a person who held a temporary or apprentice adjuster license in effect on April 13, 2026 may still apply for and be issued a public adjuster license. And under (1)(d), a public adjuster license already in force *"May be renewed by the licensee"* and *"Shall continue in force until expired, suspended, revoked, or otherwise terminated."* The freeze bites on new applications and issuance, not on existing licensees.

Two parallel bars run alongside it. KRS 304.9-432, as amended, blocks any apprentice license to a person who would be supervised by a public adjuster for the same two years. And KRS 304.9-4331(7) provides that *"For a period of two (2) years beginning on the effective date of this section of this Act, a public adjuster shall not negotiate with an insurer on behalf of an insured in the adjustment or settlement of a claim."* That section was not in the emergency clause, so it took effect July 15, 2026.

If you already hold the license, the rules changed underneath you. The compensation cap is now a flat 10 percent of insurance settlement proceeds — the old 15 percent noncatastrophic / 10 percent catastrophic split is repealed. Permitted fee structures are an hourly rate, a flat rate, a percentage rate, or another method, and you may not charge a fee on proceeds received before the contract is executed or before the rescission period ends.

Rescission is five business days, up from three, and the clock now runs from *"the date the physical copy of the contract was provided to the insured"* rather than from signature. For a contract entered into during a state of emergency declared under KRS 39A.100 or 39B.070, it is ten days from execution — days, not business days.

Contract mechanics. Your form must be prefiled with and approved by the commissioner before you contract with anyone; the commissioner has 30 business days to act, and 15 business days are allowed to amend after a disapproval. Contracts are executed in duplicate with an original physical copy to each party, and within 72 hours you must give the insurer a signed notification letter plus a physical copy of the contract. An electronic copy does not satisfy a physical-copy requirement. The contract must contain fifteen enumerated items, and six specific terms are prohibited outright — including collecting the entire fee from the first check and tying your compensation rate to whether the claim is litigated.

Financial responsibility is a surety bond or irrevocable letter of credit of at least $50,000, terminable only on 30 days' written notice; if it lapses the license *"Automatically terminate[s]"* and must be surrendered without demand. Records are kept five years after the transaction with the insured ends — a public adjuster duty, not an independent adjuster one.

Who Does Not Need a License

KRS 304.9-430(10) exempts fourteen categories from independent and staff adjuster licensing. The one adjusters rely on most is (10)(a): an individual sent into Kentucky by an insurer *for the sole purpose of investigating or adjusting a particular loss resulting from a catastrophe*.

The rest of the list: Kentucky-licensed attorneys acting professionally; technical assistants gathering facts; fraud investigators who do not adjust or determine payment; administrative and clerical staff; licensed healthcare providers and HMOs furnishing managed care without determining compensability; reinsurance and subrogation specialists; insurer officers, directors, managers and employees; U.S. managers of an alien insurer's branch; life, accident and health, disability and annuity claim handlers; self-insured employer adjusters; licensed agents with claim authority; and employees operating an automated claims adjudication system — that last one capped at *"no more than twenty-five (25) persons under the supervision of one (1) licensed individual independent adjuster."*

A separate exemption relieves staff adjusters handling food spoilage claims on residential property where coverage for that type of loss *"is contractually limited to one thousand dollars ($1,000) or less."*

Catastrophe registration — KRS 304.9-430(13). Beyond the outright exemption, an otherwise-qualified but unlicensed person may act as an emergency independent or staff adjuster if, *"within five (5) days of deployment,"* the insurer notifies the commissioner with the individual's name, Social Security number, the insurer's name, the catastrophe or loss control number, and the event name and date. Registration lasts *"not to exceed ninety (90) days, unless extended by the commissioner."* The filing is Form 8307. This route is open to independent and staff adjusters only — not public adjusters.

Who declares a catastrophe was an open question until 2026. HB 568 § 1 added a definition to KRS 304.9-020: a catastrophe is an event resulting in *"a declaration of emergency by the Governor pursuant to KRS 39A.100"* and at least one of five consequences — a large number of deaths or injuries, extensive damage to facilities sustaining human needs, overwhelming demand on state and local response resources, a severe long-term effect on general economic activity, or a severe effect on response capabilities.

Applying, and the Election You Cannot Undo

Apply through NIPR or the Department's eServices portal on Form 8301, the NAIC individual insurance license application. Business entities use Form 8301-BE with Form 8305 to designate the licensed individual responsible for compliance. Record corrections — name, address, phone, email, assumed name — go on Form 8303.

Qualifications — KRS 304.9-430(2)(c). You must be at least 18, eligible to designate a home state, *"trustworthy, reliable, and of good reputation,"* free of the KRS 304.9-440 grounds, have passed the examination for each line you want, have paid the fees, and be financially responsible. Nothing in that list is an education requirement.

Background check — 806 KAR 9:025 § 3(1)(b) requires *"a completed background check through the Kentucky Administrative Office of the Courts"* — a name-based court-records check, not fingerprints — and only *"If the applicant is designating Kentucky as his or her home state."* Enumerating all of 806 KAR Chapter 9 turns up no fingerprint requirement for any Kentucky insurance license.

Fees — 806 KAR 4:010 § 1(10) and § 1(17). The license is $50, each examination is $50, and an apprentice license is $25. Note that KRS 304.4-010 states no dollar amounts at all — it simply delegates the fee schedule to regulation, so citing the statute for a figure is a citation error.

The apprentice route — KRS 304.9-432. If you meet the adjuster qualifications except for experience, an apprentice license runs *"not to exceed twelve (12) months and is nonrenewable,"* requires you to be a full-time salaried employee under the training, direction and control of a licensed adjuster who assumes responsibility for your actions, and requires an attestation from a licensed adjuster in the same line of authority you have applied for. No examination is required. If you pass the examination during the apprenticeship, the apprentice license automatically terminates and the adjuster license issues.

The Examination — No Vendor, No Handbook

Kentucky has no third-party testing vendor. The Department of Insurance administers its own examinations. There is no PSI, no Pearson VUE, no Prometric, and therefore no candidate handbook — the document most licensing guides send you to does not exist for Kentucky.

How it works: you apply first, the Department processes the application, and only then do you schedule *"via obtaining an eServices account."* Examinations are computerized, graded on completion, and sat at Department-listed testing centers — mostly KCTCS community colleges, plus the Department's own Frankfort office. Appointments are required; *"walk-ins are not accepted."* Bring government-issued photo identification, arrive ten minutes early, and give 24 hours' notice to cancel or you may forfeit the $50 fee.

Three examinations, one per line — 806 KAR 9:025 § 3(3): a property and casualty adjuster examination, a workers' compensation adjuster examination, and a crop adjuster examination. Crop has a non-examination path: you may instead *"Demonstrate certification through the Crop Adjuster Proficiency Program"* — an active USDA Risk Management Agency card. The other two lines have no such alternative.

Length: 50 items. The Department's own study outlines establish it — the property and casualty adjuster outline states *"50 Items"* in terms, and the workers' compensation and crop outlines resolve to 50 by their published percentage-to-item ratios. Those outlines are dated 2010 to 2012 and are the current ones the Department links.

Passing score: 70 percent of the questions, and it is a raw percentage. 806 KAR 9:025 § 3(4): *"Every applicant for a license for which an examination is required shall answer correctly seventy (70) percent of the questions to pass the examination."* Not a scaled score, not an equated score. At 50 items that is 35 correct. Cite the regulation — 806 KAR 9:170, the rule titled *Minimum score of examination for license*, was repealed.

Retakes: $50 each, on Form 8304, and you may rebook *"on the next business day."* Examinations cannot be rescheduled for the same day. There is no waiting period and no cap on attempts — but see the warning below.

No prelicensing. The statutory qualification checklist omits it; 806 KAR 9:025 § 1 opens *"An individual applying for an agent license shall complete a prelicensing course of study,"* which by its own words does not reach adjusters; and the standalone prelicensing regulation 806 KAR 9:001 was repealed. The Department's education page states the requirement only for agents.

Nonresidents and Reciprocity

KRS 304.9-430(14) issues a nonresident license where the applicant is currently licensed and in good standing as an adjuster in their home state, has submitted a proper request and the fees, has filed the uniform individual application, is not denied under KRS 304.9-440 — and where *"The person's designated home state issues nonresident independent, staff, or public adjuster licenses to persons of Kentucky on the same basis."* Kentucky requires the home state to reciprocate.

"Home state" — KRS 304.9-430(12) is the state or territory where you keep your principal place of residence or business and hold a resident adjuster license. Subsection (14)(a) extends it: if your state of principal residence does not license adjusters at all, any state where you hold a resident adjuster license counts as your home state.

A nonresident licensed in good standing at home does not sit the Kentucky examination. The Department's own guidance is the mirror image: if you have not passed a state-administered adjuster examination, you must apply in Kentucky as a resident adjuster.

Nonresidents pay the same fees residents do — $50. 806 KAR 4:010 § 1(10) draws no resident/nonresident distinction for adjusters, which is notable because the same regulation surcharges nonresident *agents* ($50 against $40 individual, $120 against $100 entity). The absence is deliberate drafting, not an oversight.

KRS 304.9-170, Kentucky's examination-exemption statute, is scoped to producers. It does not mention adjusters. Do not cite it as an adjuster examination waiver. Kentucky recognizes no professional-designation waiver for adjusters either — no AIC, no CPCU, no SCLA. The only credential Kentucky accepts in place of an adjuster examination is the federal crop proficiency card, and the Department shows elsewhere that it knows how to recognize designations when it means to: 806 KAR 9:350 does exactly that for financial planning credentials.

Keeping the License

Expiration — KRS 304.9-260, as amended by 2026 Ky. Acts ch. 45 § 18. Individual licenses expire at midnight on the last day of your birth month, biennially. The cycle keys to the parity of your birth year: an even-numbered birth year renews in even-numbered years, an odd birth year in odd years. Business entities expire March 31, keyed to the year the entity was licensed.

Your first term is not a uniform two years. The section *"does not apply to temporary licenses issued under KRS 304.9-300, and licensees not licensed for one (1) full year prior to the end of the applicable biennial renewal year"* — so a license issued close to a renewal year skips that cycle.

Late renewal. *"Any renewal request and fees received by the commissioner within sixty (60) days after the date of expiration may be accepted with no interruption in license if accompanied by a penalty."* The penalty is $50, so a late renewal costs $100 all in. NIPR renders the same window as running through the end of the second month after your expiration month, and states that after it closes the license is canceled and you must apply as new. The 90-day early-renewal window NIPR advertises appears in no statute or regulation — treat it as NIPR's operational practice and check your own license record.

Continuing education — KRS 304.9-295(5): 24 hours per biennium, of which 3 must be ethics, inside the 24 rather than on top. Compliance is due by the last day of your birth month, with proof filed within 60 days after the compliance date. The commissioner may extend up to two years for good cause. There is no separate line-of-authority subrequirement for adjusters, and no flood, annuity or long-term care mandate.

There is no CE regulation at all. 806 KAR 9:220 was repealed with no successor, so the entire requirement lives in the statute. That matters for citation practice: material pointing you at 806 KAR 9:220 is pointing at dead law.

Carryover of excess hours is permitted — KRS 304.9-295(8) — but the statute conditions any cap on a regulation, and no current regulation sets one. So carryover exists and its limit is unstated. On course repetition and any per-day hour cap, the current sources are simply silent as to adjusters.

Nonresident CE is conditionally exempt — KRS 304.9-295(3)(c) covers *"Licensees holding nonresident licenses who have met the continuing education requirements of their home state and whose home state gives credit to Kentucky resident licensees on the same basis."* Satisfying your home state is not enough on its own; the reciprocity leg is independent.

Unfair Claims Practices — and Why One Act Is Enough

KRS 304.12-230 opens: *"It is an unfair claims settlement practice for any person to commit or perform any of the following acts or omissions."* Two words in that sentence carry the whole subject — *any person*, rather than *any insurer*; and *any*, without a frequency qualifier.

Kentucky has no "general business practice" element. The NAIC model act, and most states, require conduct *with such frequency as to indicate a general business practice*. Kentucky deleted that phrase by amendment effective July 15, 1988, and *Reeder* records the deletion in terms: *"this statute has been amended, effective July 15, 1988, so as to eliminate the requirement that the prohibited conduct be performed 'with such frequency as to indicate a general business practice.'"* The words *frequency* and *general business practice* appear nowhere in the current statute. A single act violates it, in a Department proceeding or a private suit alike.

Seventeen enumerated practices. Subsections (1) through (14) are the familiar NAIC-derived list — misrepresenting facts or policy provisions; failing to acknowledge and act reasonably promptly on communications; failing to adopt reasonable standards for prompt investigation; refusing to pay without a reasonable investigation; failing to affirm or deny within a reasonable time after completed proofs of loss; not attempting in good faith to effectuate prompt, fair and equitable settlements where liability has become reasonably clear; compelling insureds to litigate by offering substantially less than is ultimately recovered; settling for less than advertising material would lead a reasonable person to expect; settling on an altered application; paying without a statement of the coverage; making known a policy of appealing arbitration awards; requiring duplicative preliminary reports and formal proofs of loss; failing to settle promptly under one coverage to influence settlement under another; and failing to promptly give a reasonable explanation for a denial or a compromise offer. Subsections (15) through (17) are Kentucky's health-insurance additions, tied to external review decisions and provider overpayment and retroactive-denial rules.

Three separate unfair claims regulations, in two different KAR titles. 806 KAR 12:095 governs property and casualty. 806 KAR 12:092 governs life and health — and it is not a copy: it uses calendar days throughout and imposes a 15-day deadline to begin the investigation and a 15-day written denial, neither of which appears in the property and casualty rule. 803 KAR 25:240 governs workers' compensation and is administered by the Commissioner of the Department of Workers' Claims, not the insurance commissioner.

Penalties — KRS 304.99-020. The commissioner may impose a civil penalty *"in lieu thereof or in addition to"* suspension or revocation: not more than $10,000 per violation against an insurer, $1,000 against an agent or broker, and $2,000 against an adjuster, administrator, life settlement broker or provider, or consultant. Those amounts are confirmed as of January 1, 2025; 2026 Ky. Acts ch. 45 § 32 amended the section, and the Legislative Research Commission describes that change as repealing penalties for specialty credit producers and managing employees — a different tier from the adjuster one.

The Clocks You Actually Run

Acknowledge in 15 business days — 806 KAR 12:095 § 5(1), *"unless payment is made within that period of time."* If you acknowledge other than in writing, note and date it in the claim file. And *"Notification given to an agent of an insurer shall be notification to the insurer"* — the clock starts when the agent hears about it.

Answer the Department in 15 business days, in duplicate — § 5(2). Reply to the claimant's other pertinent communications in 15 business days — § 5(3). Provide claim forms, instructions and reasonable assistance promptly, with compliance inside 15 days deemed to satisfy the acknowledgment duty — § 5(4).

Offer payment within 30 calendar days of receipt of proof of loss — § 6(1)(a) — and on a multi-coverage claim, tender the portions not in dispute in the same window.

Two distinct delay clocks, not one. If you need more time to accept or deny, notify the first-party claimant within 30 calendar days after receipt of the proofs of loss, giving your reasons — § 6(1)(c). Then, if the investigation remains incomplete, send a further letter 45 calendar days from the date of initial notification and every 45 calendar days thereafter — § 6(1)(d). Note the second clock runs from initial notification, not from proof of loss.

Pay within 30 days — KRS 304.12-235(1), running from the date *"notice and proof of claim, in the substance and form required by the terms of the policy, are furnished the insurer."* Miss it and the settlement *"shall bear interest at the rate of twelve percent (12%) per annum."* If the delay was *"without reasonable foundation,"* the insured or provider recovers reasonable attorney's fees, and *"No part of the fee … shall be charged against benefits otherwise due the claimant."* Note the statute's payee: the named insured person or health care provider — by its terms, not third-party claimants.

Warn before a limitations bar. You may not continue settlement negotiations with an unrepresented first-party claimant whose rights may be affected by a statute of limitations or a policy time limit unless you have given written notice at least 30 calendar days before it expires — § 6.

Records: the current year plus the five preceding years — § 3(1) — accessible and retrievable, showing claim number, line of coverage, date of loss, date of payment, and date of denial or closure without payment, with each document noted as to the date received, processed or mailed.

No polygraph unless the policy or the law authorizes it. No denial for failure to exhibit property unless the file documents a breach. No denial for late written notice unless written notice is a policy condition and the failure is *"so unreasonable as to constitute a breach of the first-party claimant's duty to cooperate."* Do not mark a draft, check or letter "final" or "a release" unless the policy limit has been paid or there is an agreed compromise on coverage and amount.

Bad Faith — Broad Against the Insurer, Narrow Against You

Third-party claimants may sue for bad faith in Kentucky. KRS 446.070 provides that *"A person injured by the violation of any statute may recover from the offender such damages as he sustained by reason of the violation,"* and *State Farm v. Reeder*, 763 S.W.2d 116 (Ky. 1988) applied it to the unfair claims statute for a third-party claimant: *"We find no reason to excuse this matter because it is brought by a third party claimant."*

The Supreme Court has reaffirmed it twice — *U.S. Liability Ins. Co. v. Watson* (Ky. 2021), and *Estate of Bramble v. Greenwich Ins. Co.* (Ky. 2023), which holds that a violation *"creates a private cause of action both for the named insured and for those who have claims against the named insured, and the same standards govern both types of cases,"* and that a third-party claim may proceed without a prior final coverage determination. SB 195 (2026) would have abolished third-party bad faith; that provision did not survive the session.

The three-part test — *Wittmer v. Jones*, 864 S.W.2d 885 (Ky. 1993): *"(1) the insurer must be obligated to pay the claim under the terms of the policy; (2) the insurer must lack a reasonable basis in law or fact for denying the claim; and (3) it must be shown that the insurer either knew there was no reasonable basis for denying the claim or acted with reckless disregard for whether such a basis existed."* It governs first-party and third-party claims alike.

The safe harbour is real. *Wittmer* also holds an insurer *"entitled to challenge a claim and litigate it if the claim is debatable on the law or facts,"* and requires evidence that would warrant a punitive damages instruction — conduct *"outrageous, because of the defendant's evil motive or his reckless indifference to the rights of others"* — before the claim reaches a jury at all. A genuine coverage dispute, properly investigated and documented, is not bad faith.

Who is outside the statute. *Davidson v. American Freightways* (Ky. 2000) confines it to persons and entities *"engaged … in the business of entering into contracts of insurance,"* and holds that self-insureds are outside it: *"Absent a contractual obligation, there simply is no bad faith cause of action, either at common law or by statute."* *Merritt* (Ky. 2020) puts captive insurers outside it too. Whether the statute reaches a third-party administrator or an independent adjusting firm has never been squarely decided by a Kentucky appellate court.

A liability insured is a first-party claimant against his own carrier. *Indiana Ins. Co. v. Demetre* (Ky. 2017): *"A liability insured who seeks these benefits owed under a policy of insurance is most assuredly making his or her own claim."* *Demetre* also holds that emotional distress damages in a bad faith case need no expert testimony — *Osborne v. Keeney*'s expert requirement is confined to free-standing emotional distress torts.

Punitive damages: the statute in the books is void. *Williams v. Wilson* (Ky. 1998) held KRS 411.184(1)(c) unconstitutional under the jural rights doctrine — the provision requiring *"a subjective awareness that such conduct will result in human death or bodily harm."* The common-law gross negligence standard governs instead: wanton or reckless disregard for the lives, safety or property of others. The voided text is still printed in the statute books, and secondary sources still recite it.

Limitations: a third-party claim under the unfair claims statute runs five years under KRS 413.120(2), and *Watson* fixes accrual at the moment a binding settlement agreement on the underlying claim is reached — not when funds are disbursed and not when a release is signed.

Automobile — Choice No-Fault, and a Clock You Move Yourself

Kentucky is a choice no-fault state, and silence is a choice. KRS 304.39-060(1) provides that anyone who *"registers, operates, maintains or uses a motor vehicle on the public roadways of this Commonwealth shall … be deemed to have accepted the provisions of this subtitle."* You are inside the no-fault system unless you affirmatively opted out before the accident.

The opt-out is filed with the state, not the insurer. It is Form NF-1(a)(b)(c) P&C, prescribed by 806 KAR 39:030 § 6, filed with the Department of Insurance and effective on the Department's file-stamp date. Each household member executes individually; a parent or guardian executes for a minor. Rejection *"shall result in the full retention by the individual of his or her tort rights and tort liabilities."* Form NFV-1 P&C verifies someone's rejection status for a $5 fee — that is the form you will actually use on a file.

Basic reparation benefits: $10,000 per person, per accident, for all economic loss regardless of how many people are entitled or how many obligors there are. Deductibles of $250, $500 and $1,000 must be made available, and added reparation benefits are available on request in units of $10,000 up to the lesser of $40,000 or the liability limit above the statutory minimum.

The weekly cap is a single aggregate figure. KRS 304.39-130 caps work loss, survivor's economic loss, replacement services loss and survivor's replacement services loss together at one weekly amount — you cannot stack categories. It is weekly, not monthly, and where earnings are *"seasonal or irregular, the weekly limit shall be equitably adjusted or apportioned on an annual basis."*

The tort threshold — KRS 304.39-060(2)(b). Pain and suffering is recoverable only where medical expense *"or which would be payable but for any exclusion or deductible"* exceeds $1,000, or the injury involves permanent disfigurement, a fracture to a bone, a compound, comminuted, displaced or compressed fracture, loss of a body member, permanent injury within reasonable medical probability, permanent loss of bodily function, or death. A deductible does not defeat threshold. Any fracture qualifies on its own — the compound/comminuted list is a separate alternative, not a narrowing of it. The $1,000 has never been amended or indexed since 1975.

Minimum limits: $25,000 / $50,000 / $25,000, or a single combined limit of $60,000 — KRS 304.39-110(1)(a). The combined-limit alternative is written into the statute itself, which is unusual. Coverage must extend throughout the United States, its territories and possessions, and Canada.

Uninsured and underinsured coverage are not symmetrical. UM under KRS 304.20-020 is included unless the named insured rejects it in writing; the rejection binds all insureds and carries forward through *"any renewal, reinstatement, substitute, replacement or amended policy"* without re-offer unless the insured asks in writing. UIM under KRS 304.39-320 is only *"made available upon request"* — so there is no rejection mechanism for UIM, and no minimum limit is prescribed.

The consent procedure. *Coots v. Allstate*, 853 S.W.2d 895 (Ky. 1993) required notice and an opportunity to protect subrogation; the 30-day clocks are statutory, at KRS 304.39-320(3)–(4). The claimant gives written notice by certified or registered mail to every UIM insurer; the insurer then has 30 days to consent or to elect to preserve subrogation; if it consents or is silent, the claimant may release the tortfeasor without prejudice to the UIM claim; if it preserves subrogation, it must substitute payment of the offer amount within 30 days of receiving the notice.

Total loss — 806 KAR 12:095 § 7. Three methods: offer a comparable replacement vehicle with taxes, non-refundable license fees and transfer fees paid; make a cash settlement at the actual cost of a comparable vehicle with the same fees included; or the 35-day right of recourse — *"If the insurer is notified within thirty-five (35) days of the receipt of the settlement check that the insured cannot purchase a comparable motor vehicle for fair market value … the insurer shall reopen its claim file."* Note the trigger: receipt of the check, not the date of loss or the offer. Value comes from the local market area — a comparable vehicle's cost, quotations from two or more licensed dealers, or a nationally recognized valuation source covering 85 percent or more of makes and models for the last eight years. If the insured produces two or more independent appraisals showing a higher local value, you must consider it.

Repairs — § 8. Give the insured a copy of your estimate; it must allow repairs *"in a workmanlike manner."* If the insured's estimate is higher, either pay the difference or name a shop that will guarantee the repairs at your price. Betterment deductions are allowed *"only if the deductions reflect a measurable decrease in the market value and general overall condition,"* and must be itemized by dollar amount in the file. Aftermarket crash parts must be *"at least equal in kind and quality … in terms of fit, quality, and performance,"* and you must consider the cost of any modifications — but note that Kentucky's rule is a quality standard, not a notice-and-consent regime; there is no required disclosure or consent wording. You may not require the insured to supply parts, or to travel an unreasonable distance.

Anti-steering — KRS 304.12-275. You must tell a claimant, on notification of a motor vehicle damage claim, that they may choose the repair facility, and every appraisal must carry this notice in not less than 10-point boldfaced type: *"NOTICE: UNDER KENTUCKY LAW, THE CONSUMER AND/OR LESSEE HAS THE RIGHT TO CHOOSE THE REPAIR FACILITY TO MAKE REPAIRS TO HIS OR HER MOTOR VEHICLE."* It does not apply to automobile glass, which has its own rule from 2024.

Comparative fault is pure, and liability is several. *Hilen v. Hays* (Ky. 1984) adopted pure comparative negligence and expressly rejected the modified forms — a claimant 99 percent at fault still recovers 1 percent. KRS 411.182(1)(b) allocates fault to each party including settled and released persons; subsection (3) requires the judgment to state *"each party's equitable share,"* so there is no joint and several liability; and subsection (4) reduces the claim against non-settling parties by the released party's equitable share, not by the dollars paid.

Property — Matching, Depreciation, and a Coal-Country Coverage

There is no Kentucky standard fire policy. Forms are filed and approved under KRS 304.14-120, with deemed approval after 60 days absent disapproval. Enumerating KRS Subtitles 304.14 and 304.20, all 34 chapters of 806 KAR, and all 18 regulations in 806 KAR Chapter 14 turns up no prescribed form. Minimum content is scattered across KRS 304.14-140, -150, -160, -180 and -270.

There is no valued policy law — and Kentucky has the opposite statute. Where a valued policy law forces the insurer to pay the face amount on a total loss, KRS 304.20-260 forbids writing coverage *"for an amount greater than one hundred percent (100%) of the replacement cost of the structure."* It is an anti-over-insurance cap, the structural inverse.

Matching is mandatory — but only on replacement cost policies. 806 KAR 12:095 § 9(1)(b): *"If a loss requires replacement of items and the replaced items do not reasonably match in quality, color, and size, the insurer shall replace all items in the area so as to conform to a reasonably uniform appearance. This applies to interior and exterior losses."* The insured bears nothing beyond the deductible. Section 9(1)(a) likewise requires you to include *"any consequential physical damage incurred in making the repair or replacement."* But the whole of subsection (1) is conditioned on a policy that settles *"based on replacement cost"* — and subsection (2), the actual cash value subsection, contains only a definition and a disclosure duty. A pure ACV policy carries no matching obligation.

Actual cash value is defined by regulation, and labor may be depreciated. § 9(2)(a): ACV is *"replacement cost of property at the time of the loss less depreciation, if any. If provided for in the policy, depreciation may include the costs of goods, materials, labor, equipment, overhead and profit, taxes, fees, and services necessary to replace, repair, or rebuild the damaged property."* The regulation does not authorize labor depreciation itself — it authorizes the policy to. If the policy is silent or ambiguous, you may not depreciate labor. On request you must provide the claim file worksheets showing every depreciation deduction.

Cancellation and nonrenewal — KRS 304.20-300 to -350, not KRS 304.20-040 (which is the automobile statute). Notice is 14 days for a cancellation within the first 60 days of the policy or for nonpayment at any time; 75 days for a cancellation after 60 days, for a nonrenewal, or for a premium increase exceeding 25 percent over the preceding term for identical coverage. The notice must state the effective date and the specific reason or reasons. KRS 304.20-330 lists seven exclusive grounds for cancellation after the underwriting period, including *"Discovery of fraud or material misrepresentation made by or with the knowledge of the named insured in obtaining the policy, continuing the policy, or in presenting a claim."*

Suit limitation. KRS 304.14-370 bars clauses limiting the time to sue foreign insurers to less than one year — and by its literal terms it says nothing about domestic Kentucky insurers. *Webb v. Kentucky Farm Bureau* enforced a one-year policy clause. The general written-contract period is ten years for contracts executed after July 15, 2014 (fifteen years before then), so the gap between that and the policy's clause is entirely contractual.

Appraisal is contractual only — there is no appraisal statute and no appraisal regulation in Kentucky. Note separately that KRS 304.20-050 makes an arbitration provision non-binding, which is a different doctrine.

Mine subsidence — KRS Subtitle 304.44. Coverage is automatically endorsed onto policies in the 37 counties whose fiscal courts have voted into the program under 806 KAR 44:010 — it is not an insurer-by-insurer option. Since January 1, 2025 the maximum is $500,000 per structure with $50,000 additional living expense, up from $300,000 and $25,000. The deductible is 2 percent of the policy's total insured value, minimum $250 and maximum $500. Losses are paid within 90 days under KRS 304.44-080. An insurer may refuse coverage on a structure showing unrepaired subsidence damage until repairs are made.

Kentucky has no flood or sinkhole mandatory offer. The only peril-specific subtitle in the entire Insurance Code is 304.44, and the only peril-specific chapter in all of 806 KAR is Chapter 44. And there is no property or contractor anti-steering rule — Kentucky's anti-steering law is motor-vehicle-only, and the 2024 addition was motor-vehicle-glass-only. Nothing bars an insurer from recommending a preferred contractor on a property claim beyond the general unfair claims prohibitions.

Guaranty Fund and Fraud Reporting

Kentucky Insurance Guaranty Association — KRS 304.36-080. The association pays covered claims up to $300,000 per claimant; workers' compensation benefits are uncapped; cybersecurity insurance is capped at $500,000 per insured event; unearned premium at $10,000 per policy; and the association's total obligation for any one insolvent insurer ceases at $10,000,000 in the aggregate, workers' compensation aside.

Claims are barred at the earlier of twelve months after the liquidation order, or the court's bar date — *"A claim filed with the association after the earlier of: (i) Twelve (12) months after the date of the order of liquidation; or (ii) The final date set by the court for the filing of claims."*

There is no $100 deductible. The NAIC model imposes one on every covered claim; Kentucky dropped it. Enumerating all 18 sections of Subtitle 304.36 — including the covered-claim definition at KRS 304.36-050, the obligation section at -080, and the scope section at -030 — turns up no deductible of any amount. A Kentucky claimant recovers from the first dollar.

The net worth exclusion moved down in 2023. A first-party claim is excluded where the insured's net worth exceeds $10,000,000 on December 31 of the year before the insolvency, computed on a consolidated basis including subsidiaries. The prior threshold was $25,000,000 — the Department's own legislative bulletin records the change. Guaranty numbers usually get more generous; this one got stricter, so more large policyholders are excluded than before.

Fraud reporting is mandatory, and adjusters are named. KRS 304.47-050 makes reporting permissive for the general public but mandatory for insurers, agents and adjusters, other licensed professionals, medical review committees, and the named licensing boards.

The deadline is 14 days — and it is in the regulation. KRS 304.47-050 creates the duty but states no deadline. 806 KAR 47:010 § 6 supplies it: report *"within fourteen (14) days of determination that a suspected fraudulent act has been committed,"* to the Division of Insurance Fraud Investigation, through the Department's online portal, the Uniform Suspected Insurance Fraud Reporting Form, or the NAIC, a healthcare anti-fraud association or an insurance crime bureau. Two other counts sit nearby and should not be confused with it: insurers answer a division information request in 10 business days, and if prosecution is not begun within 60 days the prosecutor must explain why.

Immunity is narrower than good faith. The statute protects reporters from libel and slander liability *"in the absence of malice, fraud, or gross negligence."* Gross negligence defeats it — a lower bar for losing protection than the simple good-faith standard most states use.

The fraud warning on claim forms is required — KRS 304.47-030, in substance that a person who knowingly and with intent to defraud *"files a statement of claim containing any materially false information or conceals, for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime."* Applications carry the parallel statement. Reinsurers are excepted.

Criminal exposure — KRS 304.47-020, keyed to the aggregate claim value: under $500 is a Class A misdemeanor; $500 to under $10,000 a Class D felony; $10,000 to under $1,000,000 a Class C felony; and $1,000,000 or more a Class B felony. Fines run to $1,000 for an individual misdemeanant, $5,000 or more for a corporation, or twice the gain received, whichever is greater. A person damaged by a violation recovers compensatory damages plus investigation and litigation expenses including attorney's fees — with no statutory multiplier.

Workers' Compensation — A Line of Authority, and a Different Rulebook

Workers' compensation is a line of authority on your adjuster license, with its own 50-item examination. It is also governed by an entirely separate body of law: KRS Chapter 342 and the 803 KAR Chapter 25 regulations, administered by the Department of Workers' Claims — which 2026 Ky. Acts ch. 61 moved from the Education and Labor Cabinet to the Office of the Governor. That act was administrative only; it changed no benefit, deadline or payment obligation.

Coverage reaches one employee. KRS 342.630(1) covers *"Any person, other than one engaged solely in agriculture, that has in this state one (1) or more employees."* There is no headcount threshold. KRS 342.650 exempts twelve classes, including any person employed in agriculture outright, domestic servants below a threshold, temporary maintenance not exceeding 20 consecutive work days, and lay ministers and cemetery caretakers capped at 10 hours a week. Sole proprietors, partners and LLC members are not in that list at all — KRS 342.012 leaves them uncovered unless they affirmatively elect in by policy endorsement. And an employee may reject coverage under KRS 342.395 by written notice filed before injury, though an employer may not require it as a condition of employment.

An uninsured employer loses the common-law defenses. KRS 342.690(2) lets the employee claim compensation and sue at law, in an action where the employer *"may not plead as a defense that the injury was caused by the negligence of a fellow servant, that the employee assumed the risks of his employment, or that the injury was due to the contributory negligence of the employee."* Failure to insure carries a fine of $100 to $1,000, with *"each employee … and each day of violation"* a separate offense.

Benefits, effective January 1 through December 31, 2026. The state average weekly wage is $1,161.81 — note the two-year lag; the 2026 rate year uses the 2024 wage. Temporary total and permanent total run at 66⅔ percent of average weekly wage, with a maximum of $1,277.99 (110 percent of the state average) and a minimum of $232.36 (20 percent). Permanent partial is capped at $958.49 (82.5 percent), or $1,277.99 where KRS 342.730(1)(c)(1) applies. The retraining incentive benefit maximum is $871.36.

Permanent partial disability uses a grid. 66⅔ percent of wage, times the AMA impairment rating, times a statutory factor: 0.65 for a rating of 0–5 percent, 0.85 for 6–10, 1.00 for 11–20, 1.15 for 21–25, 1.35 for 26–30, 1.50 for 31–35, and 1.70 for 36 percent and above. The result is multiplied by three where the worker lacks the physical capacity to return to the type of work performed at the time of injury, or by two during a period when post-injury employment at an equal or greater wage has ceased. Duration is capped at 425 weeks where the rating is 50 percent or less, 520 weeks above that.

Income benefits terminate at age 70, or four years after the injury, whichever is later — KRS 342.730(4), effective July 14, 2018. The pre-2018 rule keyed termination to Social Security retirement age and was struck down in *Parker v. Webster County Coal* (Ky. 2017); 2018 HB 2 replaced it with the flat age-70 rule, and *Cates v. Kroger* (Ky. 2021) upheld that rule as constitutional and upheld its retroactive application. The question is settled.

Waiting period: seven days, with benefits paid retroactively from day one if disability *"continues for a period of more than two (2) weeks."*

Notice and limitations. Notice is due *"as soon as practicable"* — no day count — and KRS 342.200 forgives late notice where the employer had knowledge or the delay arose from *"mistake or other reasonable cause,"* so a late-notice denial usually fails absent demonstrated prejudice. A traumatic injury claim must be filed within two years of the accident — but where income benefits have been paid, within two years of the suspension of payments or two years of the accident, whichever is later. Cumulative trauma has its own discovery rule: notice within two years from the date a physician tells the employee the injury is work-related. Occupational disease runs three years from last injurious exposure or first distinct manifestation, whichever last occurs, with a five-year outer bar — twenty years for radiation, asbestos-related disease and the cancers specified in KRS 61.315(11)(b).

Reporting. The employer notifies the carrier within 3 working days; the first report reaches the Department within one week of an injury causing absence from work for more than one day; and a supplementary report is due on termination of disability or at 60 days if it continues. Form IA-1 is the first report; Form IA-2 is filed within one week of payments commencing, terminating, changing or resuming, and every 60 days during temporary total disability. Electronic filing through a Department-approved vendor is mandatory.

The employee picks the doctor. KRS 342.020: *"In the absence of designation of a managed health care system by the employer, the employee may select medical providers to treat his injury."* Under 803 KAR 25:096 the employee designates on Form 113 with the physician's written acceptance, gets one change without authorization, and later changes need consent that *"shall not be unreasonably withheld."* The employer's counter is to designate a managed health care system under KRS 342.020(7), which confines choice to the network. Medical bills are paid within 30 days of receipt of a statement.

Utilization review is 803 KAR 25:195 — not 25:190. Preauthorization decisions run 2 business days, retrospective review 7 business days, expedited review 24 hours, an appeal must be requested within 10 business days of written denial, and the reconsideration decision is due in 7 business days, or 5 business days after a peer-to-peer conference.

Settlements require approval. KRS 342.265: nothing *"operate[s] as a final settlement except a memorandum of agreement filed with the commissioner and approved by the administrative law judge."* A non-participating party must be served at least 10 days before submission.

Subrogation — KRS 342.700(1): the employee may claim compensation, sue the third party, or do both, *"but he shall not collect from both."* The carrier recovers indemnity and medical paid and payable, less a pro rata share of the employee's legal fees and expenses.

Coal workers' pneumoconiosis has its own scheme at KRS 342.732, tiered by ILO radiographic category combined with spirometric impairment, running from a retraining incentive benefit at the lowest tier through irrebuttable presumptions of 25, 50 and 75 percent disability to total disability for complicated pneumoconiosis. Note that *Vision Mining v. Gardner* (Ky. 2011) struck down the consensus procedure and the heightened *clear and convincing* rebuttal standard on equal protection grounds — *"pneumoconiosis is pneumoconiosis is pneumoconiosis."*

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