Kentucky has taken a major step forward in enforcing its mandatory insurance law.
All registered vehicles in Kentucky must be insured, and the liability insurers have been notifying the state all vehicles insured by them by vehicle identification numbers. The minimum liability insurance requirements are $25,000/$50,000 in personal injury liability insurance, $10,000 in personal injury protection no fault benefits, and $10,000 in property damage liability insurance.
Unfortunately there are too many vehicles on the road which are NOT insured, and they don’t get caught until pulled over for a traffic offense or have an accident. Then, when they do not have proof of insurance, the legal system takes over. But, it is too late if someone gets hurt in a car collision or accident.
Kentucky has added some teeth to enforcing its mandatory insurance law and the Department of Motor Vehicle (DMV) Regulation will now be sending out notices to the registered owners who allow their automobile insurance to lapse.
Our law firm regularly deals with with these situations when someone has been seriously injured and hurt by the negligence of an uninsured driver.
Kentucky law requires you to insure your car. Effective June 1, 2012, the DMV will mail notices to owners of registered motor vehicles that have been without automobile insurance coverage for over 60 days.
These notices mailed by the state will warn the owners that their registrations will be canceled if they do not show proof of insurance within 30 days.
It is against the law in Kentucky to operate a motor vehicle without insurance. Although mandatory insurance has been on the books for many years, the harsh reality is that too many owners just do not follow the law and innocent people are too often victimized in car crashes involving drivers who are not insured.
This new law is just a method of enforcing the law. It does not help you if you are, in fact, injured in a car accident by the negligence of an uninsured driver. The question is “how can I protect myself?”
The answer is: buy “uninsured motorist” benefits coverage. Your insurance agent must offer you this type of insurance. It is very good coverage that protects you, your family, and those in your car. Liability insurance is the insurance that protects you if you cause the wreck and hurt someone. No fault insurance or “personal injury protection” (PIP) benefits protects you, your family, and those in your car with $10,000 for medical bills and lost wages from the car accident regardless of who caused the wreck.
But, “uninsured motorist benefits” protects you for your injuries caused by the negligence of others when they have no insurance to compensate you. No fault or “PIP” or personal injury protection benefits does not cover you for pain and suffering; nor does it cover your future impairment or disability.
I would also recommend you consider buying “underinsured motorist coverage” which would protect you and your family suffer devastating injuries caused by a negligent driver who hit you who did not have enough liability insurance to make you whole.
For example, if you get hurt by an uninsured motorist, then you have your uninsured motorist benefits to protect you.
If you suffer devastating injuries, and the other driver has very little insurance, then your “underinsured motorist” benefits helps cover those huge medical bills that exceed the $10,000 in PIP benefits and provides you with compensation for pain & suffering and wage losses.
I cannot tell you the times when someone has been hurt in a car accident and had surgery and been off work for months on end. The underinsured motorist benefits was an answer to their prayers.
Here is the new advisory opinion from the Department of Insurance – Advisory Opinion 2012-03 (Statewide Enforcement of Mandatory Vehicle Insurance Based on the Monthly Full Book of Business Reporting by Insurers Pursuant to KRS 304.39-087 )–
The following Advisory Opinion is to advise the reader of the current position of the Kentucky Department of Insurance (the “Department”) on the specified issue. The Advisory Opinion is not legally binding on either the Department or the reader.
TO: All insurers and producers writing motor vehicle insurance in the Commonwealth of Kentucky
FROM: Sharon P. Clark, Commissioner
RE: Statewide enforcement of mandatory vehicle insurance based on the monthly full book of business reporting by insurers pursuant to KRS 304.39-087
DATE: May 4, 2012
Since January 1, 2006, insurers have been electronically submitting a monthly “Full Book of Business” listing of all vehicles covered by a Personal Lines policy to the Transportation Cabinet of the Commonwealth of Kentucky, Department of Motor Vehicle Regulation’s Division of Motor Vehicle Licensing (MVL). This reporting is mandated by KRS 304.39-087. Insurers have also been submitting a monthly report of Commercial Lines policies which have been terminated in the prior month in accordance with KRS 304.39-085.
The electronic data is used by county clerks and consumers to verify coverage for purposes of vehicle registrations. It is also used by law enforcement in the event of an accident or traffic stop. As of June 2012, the Department of Motor Vehicle Regulation will send Uninsured Notice letters to vehicle owners in all 120 counties based on MVL’s Mandatory Insurance Reporting Program (the “Program”).
The Program monitors the electronic Full Book of Business data submitted by Personal Lines insurers by comparing the Vehicle Identification Number (VIN) as reported by insurers against the official VIN’s per vehicle registrations. Uninsured Notices are sent to owners of vehicles for which continuous coverage is not verified. Owners are given thirty (30) days to establish that continuous coverage has in fact been maintained, or to present proof of coverage.
Otherwise, the vehicle’s registration will be automatically cancelled. A sample Uninsured Notice is attached.
To establish that continuous coverage has in fact been maintained, the owner is directed to first compare the VIN on the owner’s policy/card to the official VIN, and to contact the county clerk or MVL if the following issues are identified:
- The type of insurance, Personal or Commercial, is incorrectly identified. The clerk or MVL staff can enter a correction, and coverage may be electronically confirmed.
- The official VIN does not exactly match the insurance VIN. The clerk or MVL staff will electronically check for the VIN as shown on the policy or card. If this step confirms that coverage was reported by an insurer, a VIN alias is created and the Uninsured Notice is resolved.
Since the VIN alias is only valid as long as the insurer and policy information remain the same, the owner should still contact the agent/company to correct the insurance VIN.
If electronic verification cannot be made, the County Clerk may proceed only if the applicant has an insurance card that indicates the required security is currently in full force on the personal motor vehicle if the card was effective no more than 45 days before it is submitted to the clerk. KRS 186A.042(2)
If MVL or the clerk is not able to confirm coverage with a VIN alias, and the agency/ company records indicate there has been no lapse in coverage, the Transportation Cabinet has agreed the county clerks can accept the following:
- a signed ” no lapse letter ” on Agency/Company letterhead that is faxed directly to the clerk.
- a card, if faxed directly to the clerk
The fax delivery must identify date sent, the agency or company, the sender’s name and fax number at a minimum, and electronically identify it was sent from an agency or company. The fax provides verification from the agent/company that coverage has been in continuous effect for the dates indicated and that all information is correct as of the date of the fax transmittal. If not, the sender is considered to be committing an act of insurance fraud.
Kentucky administrative regulation, 806 KAR 39:070 § 2(4), establishes mandatory content requirements for insurance cards. The proof of insurance card shall prominently display on its face the following information, to appear in the order listed:
(a) the card title: “COMMONWEALTH OF KENTUCKY PROOF OF INSURANCE”;
(b) the name of the insurance company and its five (5) digit National Association of Insurance Commissioners (NAIC) company code
(c) the name of the insured;
(d) the effective date and expiration of coverage. If the card is issued mid-term, the card shall indicate the effective date of coverage if
different than the inception date of the policy;
(e) the policy number;
(f) the type of policy, shown by PL for personal lines or CL for commercial lines, based on how the premium for the policy is
reported on the insurer’s annual statement; and
(g) the vehicle insured either by showing the individual VIN number or “Fleet.”
* * *
/s/ Sharon P. Clark _
Sharon P. Clark, Commissioner
Kentucky Department of Insurance
On this 4th day of May, 2012