Kentucky Casualty Study Guide

Two systems carry the Kentucky-specific weight on the casualty exam: the Motor Vehicle Reparations Act at KRS Chapter 304, Subtitle 39, and workers’ compensation under KRS Chapter 342. The MVRA is much the larger of the two, and in 2026 it changed for the first time in half a century — which means a great deal of Kentucky study material now in circulation is wrong on two specific numbers.

Choice no-fault, and silence is a choice

Kentucky is a choice no-fault state. Basic reparation benefits pay regardless of fault, and anyone who registers, operates, maintains or uses a motor vehicle on Kentucky’s public roadways is “deemed to have accepted” that system. You are inside it unless you affirmatively opted out.

The opt-out is where candidates lose marks, because the rule is procedural rather than numerical. The rejection must be executed in writing or electronically on Form NF-1 and filed with the Department of Insurance at a time prior to any motor vehicle accident. It takes effect on the Department’s file-stamp date. A form signed at the kitchen table, or sitting in the agent’s file, does nothing at all — and each household member must execute it personally, so one signature does not cover a family. A parent signs for a minor under 18 where no guardian has been appointed.

The 2026 numbers — and the one that did not move

2026 Ky. Acts ch. 149 (HB 627), effective July 15, 2026, raised two figures inside basic reparation benefits:

• Weekly work loss: $500, up from $200 — the first change since 1974
• Funeral and burial: $5,000, up from $1,000

And the number that did not change: the $10,000 aggregate limit on basic reparation benefits for all economic loss from injury to any one person in any one accident. A question that offers a raised aggregate is testing whether you assumed the whole schedule moved together.

Two further wrinkles matter. First, the weekly cap is a single aggregate figure covering work loss, survivor’s economic loss, replacement services loss and survivor’s replacement services loss together — the categories do not stack. Where earnings are seasonal or irregular, the weekly limit “shall be equitably adjusted or apportioned on an annual basis.”

Second, and this is the transition trap: section 7 of the act applies the new figures only to benefits issued or renewed on or after July 15, 2026. A policy written before that date still carries $200 a week and $1,000 for a funeral until it renews. Both sets of numbers are live in the field right now.

Note also what “loss” includes, because it is a closed list: medical expense, work loss, replacement services loss, and — where injury causes death — survivor’s economic loss and survivor’s replacement services loss. There is no pain and suffering inside BRB.

The tort threshold, and the fracture that clears it alone

Tort liability for bodily injury damages is abolished up to the BRB limits except where medical expense exceeds $1,000 — or, whatever the dollar figure, where the injury consists of any of seven categories:

1. Permanent disfigurement
2. A fracture to a bone
3. A compound, comminuted, displaced or compressed fracture
4. Loss of a body member
5. Permanent injury within reasonable medical probability
6. Permanent loss of bodily function
7. Death

Read items 2 and 3 as alternatives, not as a definition narrowing item 2. Any fracture to a bone clears the threshold on its own; the compound/comminuted list is a separate route. And note that the $1,000 figure has never been indexed since 1975, which is why it looks so low.

Minimum liability limits are 25/50/25, or, in the alternative, a single limit of not less than $60,000. Added reparation benefits must be made available in $10,000 units up to the lesser of $40,000 or the liability security above the statutory minimum, and BRB deductibles of $250, $500 and $1,000 must be offered. Benefits unpaid 30 days after the obligor receives reasonable proof bear 12% per annum — or 18% where the delay was “without reasonable foundation.”

UM, UIM, and the thirty-day letter

Uninsured motorist coverage must be provided, but “any named insured shall have the right to reject in writing such coverage,” and that rejection binds every insured under the policy — not just the person who signed it.

Underinsured motorist coverage is defined in a way that trips up almost everyone. Kentucky does not compare policy limits. KRS 304.39-320 defines an underinsured motorist as “a party with motor vehicle liability insurance coverage in an amount less than a judgment recovered against that party.” Underinsurance is established by the judgment, after the fact.

That definition is exactly why the next rule exists. Where an injured party proposes to settle with the tortfeasor for less than full compensation, written notice by certified or registered mail must go to every UIM insurer. The insurer then has 30 days to consent to the settlement or to preserve its subrogation rights — and if it refuses consent in order to preserve subrogation, it must pay the injured party the amount of the written offer within 30 days of receiving the notice. Consent, or pay. It cannot do neither.

Workers’ compensation: a competitive state fund, and a list of exemptions

Kentucky’s workers’ compensation market is competitive, not monopolistic. The Kentucky Employers’ Mutual Insurance Authority (KEMI) is described by KRS 342.803 as “a nonprofit, independent, self-supporting de jure municipal corporation and political subdivision” of the Commonwealth and expressly as “a competitive state fund,” writing in the voluntary market and as an insurer of last resort. An employer may insure with any licensed carrier or qualify as an approved self-insurer.

The coverage duty is broad and the exemptions are where the exam lives: KRS 342.650 excepts any person employed in agriculture, domestic servants in a private home with fewer than two employees regularly working forty or more hours a week, persons serving a religious or charitable organisation for aid or sustenance, and certain ministers and church cemetery caretakers.

Kentucky’s guaranty association reinforces the priority the state gives these claims: workers’ compensation is the one obligation KIGA pays in full, uncapped, while every other covered claim is capped.