Home to the longest-running horse race in the United States, one of the largest producers of bourbon in the world, the cheeseburger, Kentucky Fried Chicken, bluegrass country music, the Boy Scouts of America, and so much more, it’s no wonder Kentucky is one of the most-visited states in America.

Heralded as the “Bluegrass State,” Kentucky boasts large amounts of bluegrass found in most fields, pastures, and meadows. While the state’s green land is perfect for farming and agriculture, Kentucky is also home to the 30th largest city in the United States: Louisville.

Whether you’re a farmer transporting logs from one end of the state to another, or a white-collar worker commuting to Louisville, one thing is for sure: you’re going to need car insurance.

We know finding the right car insurance policy can be difficult and tedious at times, so that’s exactly why we wrote this guide to Kentucky car insurance.

In this guide, we will go over topics like rates, types of car insurance, rules and risks of the road, and can’t-miss car insurance facts. If you want to start comparing rates today, just enter your zip code in the box above to get started; keep reading to learn more about Kentucky car insurance.

Kentucky Car Insurance Coverage and Rates

We know finding the best coverage and rate for your lifestyle can be tricky – but don’t worry! Our job is to get you the best rate possible. You have to be an insured driver in Kentucky, there’s no question about that.

To help you start figuring out which rates best fit your budget, we want to show you specific coverage options from least expensive to most expensive. This will give you an idea of what you can afford. But remember, the more car insurance you have the better.

Before we get into costs, let’s first go over Kentucky’s car culture.

– Kentucky’s Car Culture

According to the Hartford, Kentucky is the third-largest market for automobile manufacturing behind Michigan and Ohio – so cars aren’t used for just transportation in Kentucky, they’re used as a form of entertainment.

Nearly 500 automotive manufacturing firms and sites around the state produce parts and vehicles for use around the world. Toyota recently announced a record $1.3 billion investment to upgrade its assembly plant in Georgetown which is the company’s largest facility in the world and employs 8,200 people.

NASCAR also has a strong following in Kentucky with high-speed action at the Kentucky Speedway in Sparta. The track features grandstands that seat up to 100,000 fans, and it has hosted both the IndyCar Series and numerous national NASCAR touring series.

No matter where you are in Kentucky, there are a number of scenic byways that take drivers through the state’s rich natural and cultural history.

– Kentucky Minimum Coverage

Now that we know all drivers must have car insurance in Kentucky, let’s get into why drivers need and should have car insurance. Kentucky is a “choice no-fault” state, meaning that vehicle owners can “opt out” of the no-fault car insurance system and choose to sue (and potentially be sued) after a car accident.

In “at-fault” states, if you are the one who causes a car accident, you are the one responsible for covering all the costs of damages incurred from that accident. Essentially at-fault means, if you break it, you buy it. In no-fault states, usually if a driver is involved in an accident and did not cause the accident, he or she is still required to go to his insurance company and file a claim.

Nolo explains Kentucky’s complicated fault system like this, “In Kentucky, no-fault takes the form of ‘personal injury protection’ (PIP) benefits, which pay up to $10,000 for medical bills, lost wages and similar out of pocket costs resulting from the policyholder’s car accident injuries.

After an accident, it’s not just the policyholder who is entitled to PIP benefits in Kentucky. Anyone who was driving or riding in the vehicle at the time of an accident is entitled to receive PIP benefits under the policy, and a pedestrian hit by the covered vehicle can also receive PIP benefits.”

No-fault states are a little scarier to drive in because if you get hit by a car and you’re not insured, you’re still held responsible to pay for the damages.

But what exactly is minimum liability coverage? Minimum liability is the smallest car insurance policy you can buy while still being considered a legally insured driver. It is often the cheapest policy as well.

The minimum liability insurance requirements in Kentucky are:

• $25,000 for injuries per person, in a single accident you caused
• $50,000 total, for all injuries resulting from a single accident you caused
• $10,000 for property damage resulting from any accident you caused

These amounts may seem like a lot, but insurance money runs out quickly, which is exactly why many drivers have more insurance than the minimum amount required.

– Forms of Financial Responsibility

What is a form of financial responsibility? A form of financial responsibility is a fancy name for proof of insurance or proof of financial security. When and if a law enforcement officer pulls you over, he will ask to see your proof of insurance. This is to make sure you are an insured driver.

Here are a few acceptable forms of proof of financial security in Kentucky:

• Valid liability insurance ID cards
• Copy of your current car’s insurance policy
• Valid insurance binder (a temporary form of car insurance)
• Electronic insurance ID card

If you can’t show proof of insurance, you may face jail time and have to pay a fine.

Here are four penalties you may face for breaking the law:

1. Pay A Fine: On your first offense, you will face a fine of between $500 and $1,000. In subsequent offenses, you will be required to pay between $1,000 and $2,500.
2. Go To Jail: The first time you are caught driving uninsured, you may face jail time of up to 90 days or a combination of jail time and a fine. If you commit future offenses, you can expect jail time of up to 180 days or a combination of a steeper fine and jail time.
3. Lose Driving Privileges: Unless you can provide adequate proof of insurance in court, your registration will be suspended for one year the first time you are caught driving uninsured. On your second offense, your registration will again be suspended for a year. On your third offense and any thereafter, your registration will be revoked for two years.
4. Meet Reinstatement Requirements: To reinstate your registration and get back on the road, you will need to pay a $40 fee (on top of court fees). You will also need to provide solid proof of a new insurance policy. If your license was suspended for more than one year, you will need to retake and pass a driving exam.

Don’t get caught driving without insurance. It’s literally cheaper (and safer) to drive with car insurance than it to drive without it.

– Premiums as a Percentage of Income

The point of this section is to show you what percentage of your income you might be paying towards your car insurance policy each year. Kentucky’s average income per capita in 2014 was $33,237.In 2013 it was $31,951. and in 2012 it was $32,202.

In 2014, Kentucky drivers paid an average of $917.49 per year for a car insurance policy. If the average income per year is $33,237, this means drivers are paying about 2.76% of their income on car insurance alone!

Kentucky’s car insurance is still cheaper than the national average of $981.77 per year. Tennessee drivers paid $855.56 in 2014 for one year of car insurance and Ohio drivers paid $766.66 for car insurance.

Kentucky rates are still higher than both of these surrounding states, however, the average disposable income in both Tennessee and Ohio is also higher than Kentucky’s average disposable income.

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The data from the table above is pulled directly from the National Association of Insurance Commissioners. Because this data is from the year 2015, car insurance rates are most likely a little higher today.

The national average cost for car insurance is $981.77 per year. Kentucky’s average is a little lower at $917.49 per year.

We always recommend buying more car insurance than what is required; that’s why we included this next section on car insurance add-ons.

– Additional Liability Coverage in Kentucky

Although none of the additional liability coverage options shown above are mandatory, it’s still recommended that every driver carry these types of insurance.

But why?

Because Kentucky is a no-fault state, every driver is responsible to pay for damages resulting from an accident – even if a driver isn’t technically at fault for an accident. This is where uninsured and underinsured motorist insurance comes into play.

11.5 percent of all drivers in Kentucky are uninsured. This means Kentucky is ranked 26th in the U.S. for uninsured drivers.

An uninsured driver is most likely going to go bankrupt while attempting to pay for damages incurred from an accident. If that uninsured driver owes you money after causing damage to your person or vehicle, you’re never going to get it because that driver won’t have any money to pay you.

Why are loss ratio percentages important?

Loss ratio percentages are how we measure a companies financial strength. If a loss ratio is too low (under 50 percent), the insurance company might be scamming their clients because they aren’t paying out enough filed claims.

In other words, that company is only paying 50 percent of all claims for its customers who have been in accidents. That’s not a good thing. In fact, if you were to get into an accident, there’s a 50/50 chance your claim would be paid.

On the other hand, if a company’s loss ratio is too high (over 100 percent), that company might be at risk for bankruptcy because they have been paying too many claims: you’re never going to have your claim paid.

Notice all of these loss ratios above are right in the middle of these numbers.

Just remember: when you’re looking for a new insurance provider, make sure the loss ratio percentage is somewhere between 50-100 percent.

– Add-ons, Endorsements, and Riders

More car insurance equals better car insurance. Take a look at the following car insurance policies. None of them are required, but good to have. Click on the links below to learn more.

• Guaranteed Auto Protection (GAP)
• Personal Umbrella Policy (PUP)
• Rental Reimbursement
• Emergency Roadside Assistance
• Mechanical Breakdown Insurance
• Non-Owner Car Insurance
• Modified Car Insurance Coverage
• Classic Car Insurance
• Pay-As-You-Drive or Usage-Based Insurance

Add on or add them all. The choice is up to you.

– Male vs. Female Rates

Did you know details like gender, marital status and age can play a role in deciding your car insurance rate?

Even though it shouldn’t be this way, males usually end up paying more for car insurance unless they are married.

Car insurance companies bet on the fact that experience comes with age. You’re more likely to get into an accident if you’re young because of the lack of driving experience. That being said, your car insurance rate will most likely decrease the older you get if you keep a clean record.

– Cheapest Rates by Zip Code

Where you live can also affect your car insurance rate.