Kentucky Personal Lines Insurance License Exam — All Questions

What are the minimum auto liability limits a personal auto policy must generally carry to satisfy Kentucky's financial-responsibility law?

• a.$15,000 per person / $30,000 per accident bodily injury and $25,000 property damage
• b.$25,000 per person / $50,000 per accident bodily injury and $25,000 property damage✓
• c.$50,000 per person / $100,000 per accident bodily injury and $25,000 property damage
• d.$30,000 per person / $60,000 per accident bodily injury and $15,000 property damage

Kentucky's minimum tort liability limits are 25/50/25 — $25,000 per person / $50,000 per accident for bodily injury and $25,000 for property damage — or, alternatively, a single combined limit of $60,000, per KRS 304.39-110 (verified this session on apps.legislature.ky.gov). Producers should quote at least these limits and offer higher coverage. Verify current figures with the Kentucky Department of Insurance (https://insurance.ky.gov/).

How does Kentucky's auto insurance system treat fault for injury claims?

• a.It is a pure at-fault (tort) state with no first-party injury benefit
• b.It bans all lawsuits between drivers and routes claims through a state fund
• c.It is a 'choice' no-fault state: drivers are presumed to accept no-fault benefits but may reject no-fault in writing to keep full tort rights✓
• d.It is a mandatory no-fault state with no option to sue under any circumstances

Kentucky is a 'choice' no-fault state under its Motor Vehicle Reparations Act. A driver is presumed to accept no-fault (basic reparation benefits paid by the driver's own insurer), which limits suits over smaller injuries, but the driver may formally reject no-fault in writing to preserve full tort rights (the Kentucky Department of Insurance publishes an official No-Fault Rejection Form; basic reparation benefits are required security under KRS 304.39-110 and defined in KRS 304.39-020(2), confirmed this session at insurance.ky.gov). This choice structure is distinctive to Kentucky. Verify the current benefit amount and procedure with the Kentucky Department of Insurance.

Under Kentucky's Motor Vehicle Reparations Act, what does 'basic reparation benefits' most nearly describe?

• a.A state fund that repairs damaged vehicles at no cost to drivers
• b.A first-party no-fault benefit that pays the insured's medical costs and lost wages regardless of who caused the crash✓
• c.A discount on premiums for drivers with no claims
• d.A bond posted with the state in place of buying insurance

Basic reparation benefits (BRB) are Kentucky's no-fault personal injury protection: a first-party benefit that pays the insured's own medical expenses and lost wages regardless of fault. BRB is defined in KRS 304.39-020(2) and required as part of the security under KRS 304.39-110 (verified this session on apps.legislature.ky.gov). Because a driver is presumed to accept no-fault unless they reject it in writing, most Kentucky policies include this benefit. Confirm the current benefit amount with the Kentucky Department of Insurance.

With respect to uninsured/underinsured motorist (UM/UIM) coverage on a Kentucky personal auto policy, which is generally true?

• a.UM/UIM is prohibited in Kentucky
• b.UM/UIM automatically replaces liability coverage
• c.Insurers generally must make UM/UIM coverage available; the insured may accept or reject it✓
• d.UM/UIM is only available to commercial fleets

Kentucky auto insurers generally must make uninsured/underinsured motorist coverage available; the applicant may accept it or reject it. UM/UIM protects the insured when the responsible driver has no or insufficient coverage. Confirm the current UM/UIM offer-and-rejection rules with the Kentucky Department of Insurance.

How are cancellation and nonrenewal of a personal auto or homeowners policy regulated in Kentucky?

• a.An insurer may cancel any personal policy at any time for any reason with no notice
• b.Only the policyholder may ever cancel; insurers can never cancel mid-term
• c.There are no notice rules; cancellation is governed solely by the contract
• d.State law limits the reasons an insurer may cancel or nonrenew and requires advance written notice to the insured; confirm the exact notice period with the Kentucky Department of Insurance✓

Kentucky, like other states, restricts mid-term cancellation of personal auto and homeowners policies to specified reasons (such as nonpayment or material misrepresentation) and requires advance written notice of cancellation or nonrenewal. The exact number of days varies by reason and line — verify the current Kentucky notice periods with the Kentucky Department of Insurance.