On the Kentucky Property & Casualty exam, the Personal Automobile Policy appears both as a standard ISO-style contract and as a set of Kentucky auto statutes you must apply. This standalone guide reviews the policy's coverage parts, then drills into the Kentucky overlay: the choice no-fault system under the Motor Vehicle Reparations Act, Basic Reparation Benefits (PIP), the 25/50/25 financial-responsibility minimums, pure comparative negligence, and uninsured/underinsured-motorist rules. The Kentucky-specific material is where most state credit is earned.

Policy structure (the national base)

The Personal Auto Policy (PAP) is a packaged contract organized into lettered parts:

• Part A — Liability: pays bodily injury (BI) and property damage (PD) the insured is legally liable for; the insurer provides a defense, and defense and certain supplementary payments are paid in addition to the limit.
• Part B — Medical Payments: pays medical/funeral costs for the insured and occupants regardless of fault.
• Part C — Uninsured/Underinsured Motorists: pays the insured's injuries when the at-fault party is uninsured or underinsured.
• Part D — Coverage for Damage to Your Auto: Collision and Other Than Collision (Comprehensive), each with a deductible, settled at Actual Cash Value (ACV).
• Part E — Duties After an Accident or Loss and Part F — General Provisions.

Limits may be written as split limits (e.g., 25/50/25) or as a Combined Single Limit (CSL). The declarations page identifies the named insured, the covered autos, the coverages, and the limits. Insureds include the named insured, resident spouse, resident relatives, and permissive users. Eligible vehicles are private passenger autos, pickups, and vans not used mainly for business. That framework is national; Kentucky governs the limits and the liability environment around it.

Kentucky's choice no-fault system

Here is the defining Kentucky feature: under the Motor Vehicle Reparations Act (MVRA), Kentucky is a choice no-fault state. By accepting coverage, a motorist is presumed to accept a tort limitation and in exchange receives Basic Reparation Benefits (BRB)—Kentucky's term for personal injury protection (PIP)—that pay the insured's medical, wage-loss, and related expenses regardless of fault, up to a statutory amount.

The "choice" piece is what makes Kentucky unusual: an insured who wants to preserve the unlimited right to sue must reject the tort limitation in writing. If they do not reject it, their right to sue for lesser injuries is restricted, and they rely first on their own BRB. Memorize the headline: Kentucky is choice no-fault; BRB/PIP applies by default unless the tort limitation is rejected in writing.

When fault still matters (for liability claims), Kentucky uses pure comparative negligence: a claimant's recovery is reduced by their percentage of fault but never barred, even if they are mostly at fault. (Contrast this with modified-comparative states that bar recovery above a 50% or 51% threshold.)

Financial responsibility: 25/50/25

Every Kentucky driver must show financial responsibility, usually by carrying liability insurance at or above the minimum split limits, commonly cited as 25/50/25 (verify the current statute):

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

Shorthand: "25/50/25." In split limits the middle number ($50,000) is the most paid for all bodily injury in one accident, and the third number ($25,000) is the property-damage cap per accident. These are statutory floors; producers routinely recommend higher limits.

The coverage parts in Kentucky practice

• Part A — Liability pays sums the insured becomes legally responsible for due to BI or PD to others, with supplementary payments (defense costs and certain expenses) paid on top of the limit. It excludes intentional damage and certain other listed situations.
• Basic Reparation Benefits (PIP) is Kentucky's no-fault first-party coverage paying the insured's own medical and wage-loss expenses regardless of fault.
• Part B — Medical Payments pays reasonable medical expenses for the insured and occupants regardless of fault (separate from BRB).
• Part C — Uninsured Motorist (UM) responds when the at-fault driver has no liability insurance (and to hit-and-run). Underinsured Motorist (UIM) applies when the at-fault driver's limits are too low to cover the insured's damages, paying the gap.
• Part D — Physical damage provides Collision (impact/overturn) and Comprehensive / Other Than Collision (fire, theft, vandalism, hail, animal strikes); a deductible applies, and a total loss is paid at ACV.

Other tested PAP features

• Coverage territory is generally the United States, its territories and possessions, and Canada.
• A newly acquired auto is covered for a limited time if reported within the required period.
• A permissive user driving with consent is generally covered; a small owned utility trailer receives certain coverage.
• A named non-owner policy provides liability for someone who drives but does not own a vehicle.
• After paying a claim, the insurer's subrogation (transfer of rights) provision lets it pursue the at-fault party.

Cancellation and nonrenewal

Kentucky regulates how an insurer may end a personal auto policy and generally requires advance notice before canceling or nonrenewing, so the insured can find replacement coverage. Treat specific notice windows as statutory and verify the current figures; the testable principle is that notice is required and cancellation after a policy is established is limited to specific reasons.

Key Kentucky numbers to memorize

Common exam traps

• Calling Kentucky a pure tort or no-fault-only state. It is choice no-fault—BRB/PIP by default unless the tort limitation is rejected in writing.
• Applying a 50%/51% bar. Kentucky uses pure comparative negligence; recovery is reduced, not barred.
• 25/50/25—the final $25k is property damage; don't slide it into a BI slot.
• Confusing BRB and Med Pay. BRB is the statutory no-fault benefit; Med Pay is a separate first-party coverage.
• Mixing up UM and UIM. UM = the other driver has none; UIM = the other driver has too little.
• Forgetting hitting an animal is Comprehensive, not Collision.
• Liability defense/supplementary payments are paid on top of the limit (national rule that still applies).

Quick recap

• The PAP's Parts A–F structure is national; Kentucky sets the limits and legal framework.
• Kentucky is a choice no-fault state under the Motor Vehicle Reparations Act: insureds receive Basic Reparation Benefits (PIP) regardless of fault unless they reject the tort limitation in writing.
• For liability, Kentucky applies pure comparative negligence (recovery reduced, never barred).
• Minimum liability is commonly 25/50/25 (verify).
• UM covers an at-fault driver with no insurance; UIM fills the gap when limits are too low.
• Physical-damage coverages settle at ACV, and the insurer must give advance notice to cancel or nonrenew.