Kentucky Car Insurance: Factors that Affect Car Insurance Rates

By Insurance.com Posted : 01/30/2007

If you are a driver in Kentucky (or anywhere for that matter), you know how complicated and confusing it can be to file a car accident claim, switch car insurance companies or simply add a person on to your policy. To help make things easier when dealing with your auto insurance company, we have listed some helpful tips for Kentucky car insurance customers below. Understanding these items can not only save you a lot of time and money on your Kentucky auto insurance when you compare car insurance quotes, but it will also help you be better prepared in the event of a car accident.


1. How your Kentucky car insurance company determines your car's value after it has been declared a "total loss."
When totaling your car, your insurance company's goal is to help you find a new car within the same market. To do this, car insurance companies use three different methods for determining the value of the car declared a total loss, such as:


If the car insurance company is unable to find a car from within your area, they may have to find a replacement car outside your zip code, which can dramatically affect your car's true value. For instance, if you reside in a big city within Kentucky, such as Louisville or Lexington, then the cost of replacing your car will likely be more expensive then if you lived in a suburb or more rural part of Kentucky.

2. When switching car insurance companies, you must cancel your insurance policy first.
Though it is possible to cancel your coverage at anytime, it is important to note that many insurance companies require a written statement, including the date of termination, in order to officially close your car insurance policy. If you do not do this, and you receive and ignore the next bill, your policy will be canceled automatically by the insurance agency for delinquency of payment. The downside to this automatic cancellation is that it will show up on your credit record, which could potentially impact your credit score!

The safest thing to do when switching car insurance companies is to call your company and let them know that you are canceling your policy. The company will send you a cancellation request that needs to be filled out and sent back.

3. Adding a teen to your car insurance policy
Most insurance companies do not require you to add your teen to your car insurance policy when they are a certain age, only when they receive their license. On the other hand, if you are in a high-risk pool, you may be required to add them when they receive their driver's permit. If you forget to add your licensed teen, and they are involved in a car accident, they will be covered; however, your insurance company may charge you back premiums from the date your teen received a license.

For your Kentucky teen to begin the process of receiving their license, they must complete the following steps:

  1. Take and pass the written knowledge and vision test
  2. Receive the Instruction Permit
  3. Practice driving with a licensed driver who is 21 years of age or older for at least 180 days
  4. Make an appointment at the Circuit County Clerk's office to take the Driving Skills Test
  5. Pass the Driving Skills Test to receive a Provisional License
  6. Take the four-hour Graduated Licensing course one year after receiving the Provisional License
  7. Take the Graduated Licensing four hour course
  8. Receive your Kentucky license with full adult privileges after the age of 18


This process is for first time drivers who are at least 16 years old, but not yet 18. To ensure that the teen driver receives ample time to practice and to offset the number of accidents that involve teen drivers each year, Kentucky has different privileges for each provisional license:

Instruction Permit
Teen is permitted to drive between the hours of 6:00 a.m. and 12:00 a.m. with a licensed driver who is 21 years old or older. Instruction Permits are valid for one year.

Provisional License
Teens must pass the Driving Skills Test to receive the Provisional Licenses. Teens must complete the Graduated Licensing course with one year of receiving the Provisional License and cannot receive more than 7 points before the age of eighteen. If either condition is violated, the license will be suspended.

To learn more about Kentucky teen driver laws and regulations, please visit the Kentucky DMV.

Paying in installments may increase your car insurance
"Fractional premium" fees are usually charged when you divide your car insurance annual premium into installments. Six month, quarterly or monthly are the typical breakdowns for most insurance companies. Generally, the more you break down your installments, the higher the administrative/fractional premium fee. Always ask when applying for a new car insurance policy, and see exactly what the fees are for each payment you break down. Make sure to also ask your insurance provider if they offer an alternative way to make payments, such as Automatic Clearing House (ACH) processing, which withdraws the funds right from your checking account. This may help eliminate processing fees while helping you stick to your budget.

5. Personal property in your car is not covered by your auto insurance
Stolen or damaged items from within your car are not covered by your auto insurance policy. Most policies will only cover smaller and less expensive items like CDs, but if you carry more expensive things, you will want to consider adding a rider to your home insurance policy. Keeping photos or video of your items is also a good idea. If something is stolen from your car, you may have to file a claim on your home insurance if you do not have a rider in place.

6. Paying for someone else's bad driving
If you loan your car to someone and they end up crashing it, you will have to file a claim with your car insurance company. As a result, you will have to pay your deductible (or any that apply) and your car insurance rate could increase. If your car is taken without permission, you are typically not held liable. If the driver is uninsured and causes damages exceeding your policy limit, the injured party may come after you for medical or property-damage expenses and not your friend.

7. How much does your car model affects your premium
The auto insurance company premium rating system for cars is on a scale from 3 to 27. The ratings are established by the Insurance Services Office (ISO), and the higher the number of your model, the higher your premium will likely be. These numbers are only available to auto insurance companies - so, you're unable to try and find out your car's number before you purchase your car. But you can contact your car insurance company for a quote to gain an idea of how much it will cost to cover your new wheels.

Even though most states typically have similar laws in place for car insurance, they do not typically have similar car insurance rates. That because Kentucky car insurance rates are influenced by Kentucky geographic location and its' state laws. With that being said, it is always a good idea to shop around and compare the rates of various auto insurance companies. To assist you in the processes Insurance.com offers an auto insurance comparison application. Here, you will be able to evaluate multiple rates from best-in-class insurance providers - helping you find the cheapest auto insurance coverage for your budget.

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