While cost of living in Kentucky is usually below the national average, car insurance premiums continue to rise. So, what's driving rates up? Two of the state’s major metropolitan areas (Louisville and Lexington-Fayette) are among the top 100 U.S. cities with the highest rates of automobile crime, based on data from the National Insurance Crime Bureau’s 2016 Hot Spots Report. That’s why it’s so critical for Kentucky residents to make sure their auto insurance has them fully covered.

Kentucky Minimum Liability

Minimum liability insurance is the part of a policy that covers drivers and property outside of your own car. This may include damages to the other car, occupants of another car, or even property, such as a mailbox. In Kentucky, the minimum liability numbers for auto insurance are as follows:

  • $25,000 bodily injury coverage per person
  • $50,000 bodily injury coverage per accident
  • $10,000 property damage coverage per accident

This is significantly lower than the industry standard of $50,000 per person, $100,000 per accident, and $50,000 for property damage, commonly called a 50/100 plan. Furthermore, it may be far too low.

Say, for example, you get into an accident with an Audi, Cadillac, or other luxury vehicle. Those cars’ price tags will likely exceed your minimum property damage liability, which means you’ll be left paying for the rest out of pocket. With this in mind, you should always buy as much insurance as you can afford.

In addition to bodily injury and property damage coverage, the state of Kentucky has a couple other requirements. First, drivers to have uninsured motorist and underinsured motorist coverage, which provides drivers with compensation when an at-fault motorist has insufficient or no liability insurance or when the at-fault motorist is a hit-and-run driver.

Second, Kentucky drivers must obtain personal injury protection coverage, which allows auto insurance policyholders to recover financial losses for medical, rehabilitation, loss of earnings and funeral expenses from their own insurance company regardless of who is at fault in the accident.

Of course, there are many elements that factor into auto insurance premiums, including your age, driving history, and ZIP code. That’s why we suggest shopping around to find the right coverage at your best rate. Our review of Kentucky’s top providers is a good place to start.

Kentucky Auto Insurance Reviews

Progressive

Progressive earned our top spot, and not just because the insurer has the most cheerful spokesperson in Flo. For starters, it received average customer satisfaction ratings from Consumer Reports and very good overall and excellent scores for timely payment from J.D. Power and Associates — both of which were on par with the other Kentucky car insurance providers. Progressive also received “strong” financial ratings from A.M. Best, Moody’s, and Standard & Poor’s.

It’s no surprise then that the insurer is an excellent option for Kentuckians — especially those on a budget. To begin with, it was one of the few insurers that allowed us to obtain an online quote.

Once you enter basic information about yourself and your vehicle, Progressive gives you three different options for insurance based on your budget: basic, choice, and recommended. In addition to the cost of each, the site lets you know how much money you’ll save by paying in full. The tool also highlights areas where you may be paying too much or too little, and gives you the option to use its Name Your Price tool.

With this tool, which pops up alongside your three quotes, you can type in how much you want to pay and Progressive will pull up an option that fits your budget. For example, when we chose $100, we were presented with the option of paying $60.80 today, then $95.97 per month for six months.

That isn’t the only way Progressive helps you save, though. The insurer also offers multiple discounts, including quick and easy ones, such as savings for starting an online quote, paying in full, signing documents online, and using Snapshot, a program that uses an app or mobile device to track and reward you for safe driving habits.

Progressive’s coverage options are also top notch. Policies include everything from uninsured motorist property damage coverage to gap insurance, which pays up to 25 percent more than your car’s actual cash value towards the amount you owe your lender if your car is ever declared a total loss.

Like other insurers, Progressive also offers collision coverage. That coverage is unique, however, in that it includes coverage for your pets’ injuries if they are hurt in an accident.

Although Progressive is a great option, its website is decidedly lacking. Standard versus add-on coverage is not always clear, and the site has limited information and resources, especially when you look at the other four Kentucky auto insurers.

Liberty Mutual

Liberty Mutual also boasts solid financial and customer satisfaction ratings along with plenty of discounts, including options other insurers didn’t offer, such as savings for drivers with hybrid vehicles, drivers who are newly married or retired, and recent grads.

We also appreciate the fact that Liberty Mutual’s online quote tool automatically added many of those discount options, such as safety devices.

Where Liberty Mutual really shines, though, is in its coverage. That begins with Liberty’s coverage for specific demographics. The insurer offers tons of resources for teen drivers, including a teen driving contract and discounts for safe driving and good grades.

Liberty not only tailors its coverage to students, but teachers as well, with teachers auto insurance. Depending on what school they teach at (you can check via Liberty’s live chat tool), Kentucky educators may be eligible for this a trio of benefits. If teaching materials or school-owned property — everything from binders to electronics — is damaged or stolen from your car, Liberty will cover up to $2,500 in damages for each occurrence. Plus, teachers have a $0 deductible if they’re involved in a collision while driving on school business and if their vehicles are vandalized on school property or during school-related events.

While the standard coverage is great, optional coverage is particularly impressive. For example, if you are a driver who has been accident and violation free for five years, accident forgiveness coverage ensures the price of your policy won’t increase after your first accident.

You also have several add-on options in the event you need gap insurance. With New Car Replacement coverage, if your totaled car is less than one year old and has less than 15,000 miles, Liberty Mutual gives you not just the depreciated value of your old car, but the funds necessary for a brand new car.

If your car is older than a year or has more mileage on it, Better Car Replacement has you covered, too. This option ensures that if your car is totaled, you can purchase a replacement that is a year newer with 15,000 fewer miles.

Allstate

Allstate’s standard coverage goes above and beyond. It not only saves you money for safe driving, but may even help you earn some. That begins with Allstate’s Claim Satisfaction Guarantee: If you’re not happy with your auto claim, you’ll receive credit amounting to six months' worth of premium costs — no questions asked.

We should note that while Allstate received high ratings from Consumer Reports, Allstate’s regional JD Power and Associate’s rating was below average, dropping the insurer down a few spots on our list.

Allstate also rewards motorists for driving safely. By signing up for Allstate’s Drivewise app, customers immediately receive 3 percent off their policies. They are also eligible to earn cash back every six months, provided they take at least 50 trips and exhibit safe driving behaviors, such as staying below 80 mph and limiting hard braking. And, drivers can complete safe driving challenges to earn Allstate Rewards.

Aside from solid standard coverage, Allstate offered the most coverages and endorsements — 15 — of the insurers we examined. Those options range from rental reimbursement, roadside assistance, and new car replacement to less common offerings such as sound system insurance.

Additionally, Allstate offers many discount options. Several of them, such as airbags and other devices are automatically added when you request an online quote. Other savings include discounts for paying online or paying your policy in full as well as the Smart Student Discount, available for unmarried drivers younger than 25 who meet certain requirements.

State Farm

Although it is near the bottom of our list, State Farm is still an excellent option. It writes the most policies of any insurer in the Bluegrass State, and with good reason. Of the state’s top five insurers, State Farm received the highest financial ratings from A.M. Best, Moody’s, and Standard & Poor’s.

The company’s customer service ratings from both J.D. Power and Associates and Consumer Reports are also high; Consumer Reports gave State Farm a score of 89, the highest of the five, while J.D. Power and Associates awarded State Farm very good overall and excellent scores for timely payment. Remember: Customer service can make all the difference in the aftermath of an accident.

Ultimately, however, State Farm did not stand out. In particular, the insurer’s coverage and discounts are decidedly average. Rental car reimbursement and roadside assistance are among other standard options. Drivers can also opt for rideshare coverage, which is available from many other providers.

Similarly, State Farm offers a few discount options, such as up to 20 percent off for multiple vehicles and up to 17 percent off for multiple policies, as well as discounts for remaining accident-free and completing driver safety courses.

Kentucky Farm Bureau

Because Kentucky Farm Bureau is a small regional insurer, there is limited information about its coverage, discounts, and customer service. That said, if you prefer the personal attention that a smaller, local insurer provider, Kentucky Farm Bureau is worth looking into.

A regional provider has unique benefits, including exemplary knowledge of the area as well as the ability to provide its policyholders with one-on-one attention. In order to access that attention, you’ll have to largely forgo the website and call an agent instead.

Know going in that there’s a small annual membership fee — roughly $35, depending on your location. This membership not only earns you access to auto insurance, but a host of other benefits, too. These include savings programs through state-wide companies, including discounts on hotel rooms, rental cars, and computers.

And for some Kentucky drivers, the Farm Bureau’s work is enough of a benefit for joining. Kentucky Farm Bureau was founded in 1919 to give farmers an effective voice in public policy matters. The annual membership fees provide the bureau with a large base to lobby on behalf of farmers and fund the voluntary staff’s activities — such as grants to plant gardens, the Institute for Future Agricultural Leaders, beef tours, and farm field trips — that promote and educate communities about agriculture.

No-fault insurance laws may contribute to higher average premiums

As we mentioned earlier, Kentucky auto insurance premiums are some of the highest in the nation. This is partially due to the high rates of auto-related crime in the state.

Another notable element, however, is the fact that Kentucky is a no-fault state. This means that auto insurance policyholders can recover financial losses from their own insurance company — regardless of who is at fault — through a benefit coverage called personal injury protection (PIP).

According to the Kentucky Department of Insurance, “Basic PIP is to be paid by the insurer of the vehicle in which the injured person is riding at the time of an accident, or the vehicle which strikes a pedestrian, regardless of who was at fault in the accident.”

If you dig further into the details, you’ll find that motorists can sue for severe injuries, and pain and suffering only if the case meets certain conditions. These conditions, known as a threshold, relate to the severity of injury, and in Kentucky, the threshold is conveyed in the dollar amounts of medical bills.

One disadvantage of this model is that it may encourage the submission of fraudulent claims. As the Insurance Information Institute explains, PIP coverage is often exploited by dishonest doctors and clinics that bill for unnecessary and expensive medical procedures, pushing up costs.

New legislation aims to lower auto insurance costs

Under current law, all bills are presumed to be reasonable and are required to be paid within 30 days and there is no limit on PIP charges. Senate Bill 121 seeks to remedy these issues by defining the terms "health care provider" and "medical expense" and requiring medical providers to charge the same price as worker compensation claims.

SB 121 also prohibits the practice of “balance billing,” which involves a medical provider aggressively pursuing a consumer for payment of amounts above the fee schedule/agreed-to amounts paid to satisfy the bill. It also raises wage loss benefits from $200 to $400 per week.

There are some opponents to the bill. Senator Ray S. Jones II, for example, objected to SB 121, saying what’s allowed to be charged for worker compensation claims is not enough money to cover most medical providers’ expenses.

Those in the insurance industry, however, applaud the bill. SB 121 is sponsored by insurance agent and senator Rick Girder (R) and endorsed by The Property Casualty Insurers Association of America (PCI).

“Senate Bill 121 would help consumers by leveling the playing field between what auto insurers and other payors are charged for most medical procedures by utilizing the well-functioning, proven medical fee schedule.”

Junkas added that PCI hopes the Kentucky House takes up the measure. If the house does choose to do just that, it won’t be until the next legislative session, which begins in January 2019.

The Bottom Line

When you consider the costs of getting into an accident, purchasing car insurance is a no-brainer And not just the minimum. Kentucky drivers should aim to purchase as much auto insurance as they can afford. To help you get the best price possible, request quotes from multiple providers and regularly review your policy with your agent.