{"data":{"id":"us-ky/krs-304.20-040","jurisdiction":"us-ky","citation":"KRS 304.20-040","heading":"Cancellation, nonrenewal, or termination of automobile insurance --","body":"Definitions -- Scope -- Penalties.\n(1) As used in this section:\n(a) \"Policy\" means an automobile liability insurance policy, delivered or issued\nfor delivery in this state, insur ing a single individual or husband and wife\nresident of the same household, as named insured, and under which the\ninsured vehicles therein designated are of the following types only:\n1. A motor vehicle of the private passenger or station wagon type that is\nnot used as a public or livery conveyance for passengers, nor rented to\nothers; and\n2. Any other four -wheel motor vehicle with a load capacity of one\nthousand five hundred (1,500) pounds or less which is not used in the\noccupation, profession, or business  of the insured; provided, however,\nthat this section shall not apply:\na. To any policy issued under an automobile assigned risk plan; or\nb. To any policy covering garage, automobile sales agency, repair\nshop, service station, or public parking place operation hazards;\n(b) \"Automobile liability insurance policy\" includes only coverage for bodily\ninjury and property damage liability, basic reparations benefits, and the\nprovisions therein, if any, relating to medical payments, uninsured motorists\ncoverage, underinsured motorists coverage, and automobile physical damage\ncoverage;\n(c) \"Renewal\" or \"to renew\" means the issuance and delivery by an insurer of a\npolicy replacing at the end of the policy period a policy previously issued and\ndelivered by the same ins urer, or the issuance and delivery of a certificate or\nnotice extending the term of a policy beyond its policy period or term;\nprovided, however, that any policy with a policy period or term of less than\nthree (3) months shall for the purpose of this secti on be considered as if\nwritten for a policy period or term of three (3) months. Provided, further, that\nany policy written for a term longer than one (1) year or any policy with no\nfixed expiration date, shall for the purpose of this section, be considered  as if\nwritten for successive policy periods or terms of one (1) year, and the policy\nmay be terminated at the expiration of any annual period upon giving seventy-\nfive (75) days' notice of nonrenewal prior to the anniversary date;\n(d) \"Nonpayment of premiu m\" means failure of the named insured to discharge\nwhen due any of his or her obligations in connection with the payment of\npremiums on a policy, or any installment of the premium, whether the\npremium is payable directly to the insurer or its agent or indi rectly under any\npremium finance plan or extension of credit;\n(e) \"Declination\" or \"decline\" means either the refusal of an insurer to issue an\nautomobile liability insurance policy upon receipt of a written nonbinding\napplication or written request for co verage from its agent or an applicant, or\nrefusal of an agent to transmit to an insurer a written nonbinding application\nor written request for coverage received from an applicant. The offering of\ninsurance coverage with a company within an insurance group that is different\nfrom the company requested on the nonbinding application or written request\nfor coverage, or the offering of insurance upon different terms than requested\nin the nonbinding application or written request for coverage, shall be\nconsidered to be a declination; and\n(f) \"Agent\" includes but is not limited to surplus lines broker.\n(2) (a) A notice of cancellation of a policy shall be effective only if it is based on one\n(1) or more of the following reasons:\n1. Nonpayment of premium;\n2. The driver's license or motor vehicle registration of the named insured or\nof any other operator who either resides in the same household or\ncustomarily operates an automobile insured under the policy has been\nunder suspension or revocation during the poli cy period or, if the policy\nis a renewal, during its policy period or the one hundred eighty (180)\ndays immediately preceding its effective date;\n3. Discovery of fraud or material misrepresentation made by or with the\nknowledge of the named insured in obta ining the policy, continuing the\npolicy, or in presenting a claim under the policy;\n4. Discovery of willful acts or omissions on the part of the named insured\nthat increase any hazard insured against; or\n5. A determination by the commissioner that the cont inuation of the policy\nwould place the insurer in violation of this chapter or the rules or\nadministrative regulations of the commissioner.\n(b) This subsection shall not apply to any policy or coverage which has been in\neffect less than sixty (60) days at the time notice of cancellation is mailed or\ndelivered by the insurer unless it is a renewal policy.\n(c) Modification of automobile physical damage coverage by the inclusion of a\ndeductible not exceeding one hundred dollars ($100) shall not be deemed a\ncancellation of the coverage or of the policy.\n(d) This subsection shall not apply to nonrenewal.\n(3) No notice of cancellation of a policy to which subsection (2) of this section applies\nshall be effective unless mailed or delivered by the insurer to the nam ed insured at\nleast twenty (20) days prior to the effective date of cancellation; provided, however,\nthat where cancellation is for nonpayment of premium, at least fourteen (14) days'\nnotice of cancellation accompanied by the reason therefor shall be given . This\nsubsection shall not apply to renewals. A policy or coverage which has been in\neffect less than sixty (60) days at the time the notice of cancellation is mailed or\ndelivered by the insurer is not limited to the reasons for cancellation set forth in\nsubsection (2)(a) of this section unless it is a renewal policy. Notice of cancellation\nfor a policy that has been in effect for less than sixty (60) days shall be mailed or\ndelivered to the named insured at least fourteen (14) days in advance of the effective\ncancellation date.\n(4) No insurer or agent shall decline, refuse to renew, or cancel a policy of automobile\ninsurance solely because:\n(a) Of the credit history, lack of credit history, or the following extraordinary life\ncircumstances that directly in fluence the credit history of the applicant or\ninsured:\n1. Catastrophic event, as declared by the federal or state government;\n2. Serious illness or injury, or serious illness or injury to an immediate\nfamily member;\n3. Death of a spouse, child, or parent;\n4. Divorce or involuntary interruption of legally owed alimony or support\npayments;\n5. Identity theft;\n6. Temporary loss of employment for a period of three (3) months or more,\nif it results from involuntary termination;\n7. Military deployment overseas; or\n8. Other events, as determined by the insurer;\n(b) The applicant or insured has previously obtained automobile coverage through\na residual market mechanism or from a carrier providing nonstandard\ncoverage;\n(c) The applicant or insured has sustained one (1) or more losses that immediately\nresult from a natural cause without the intervention of any person and that\ncould not have been prevented by the exercise of prudence, diligence, and\ncare;\n(d) Of the race, religion, nationality, ethnic group, age, sex, o r marital status of\nthe applicant or named insured; or\n(e) Another insurer previously declined to insure the applicant or terminated an\nexisting policy in which the applicant was the named insured.\n(5) No insurer shall fail to renew a policy unless it shal l mail or deliver to the named\ninsured, at the address shown in the policy, at least seventy -five (75) days' advance\nnotice of its intention not to renew. If notice is not provided, coverage shall be\ndeemed to be renewed for the ensuing policy period upon payment of the\nappropriate payment under the same terms and conditions, until the named insured\nhas accepted replacement coverage with another insurer, or until the named insured\nhas agreed to the nonrenewal.\n(6) The transfer of a policyholder between comp anies within the same insurance group\nshall be considered a nonrenewal.\n(7) Renewal of a policy shall not constitute a waiver or estoppel with respect to grounds\nfor cancellation which existed before the effective date of the renewal.\n(8) If the insurer has manifested its willingness to renew by mailing or delivering a\nrenewal notice, bill, certificate, or policy to the first -named insured at his or her last\nknown address at least thirty (30) days before the end of the current policy period\nwith the amount of the renewal premium charge and its due date clearly set forth\ntherein, then the policy shall expire and terminate without further notice to the\ninsured on the due date, unless the renewal premium is received by the insurer or its\nauthorized agent on or before that date. When any policy terminates pursuant to this\nsubsection because the renewal premium was not received on or before the due\ndate, the insurer shall, within fifteen (15) days, deliver or mail to the first -named\ninsured at his  or her last known address a notice that the policy was not renewed\nand the date on which the coverage under it ceased to exist.\n(9) (a) Proof of mailing of renewal premium to the insurer or its agent, when\nauthorized, on or before the due date, shall cons titute a presumption of receipt\npursuant to subsection (8) of this section.\n(b) Proof of mailing of notice of cancellation or of intention not to renew or of\nreasons for cancellation or nonrenewal to the named insured at the address\nshown in the policy shall be sufficient proof of notice.\n(10) No insurer shall impose or request an additional premium higher than its standard\npremium for automobile insurance, cancel or refuse to issue a policy, or refuse to\nrenew a policy solely because the insured or the app licant is an individual with a\ndisability, so long as the disability does not substantially impair the person's\nmechanically assisted driving ability.\n(11) When an automobile liability insurance policy is canceled other than for\nnonpayment of premium, or i n the event of failure to renew a policy of automobile\nliability insurance, the insurer shall notify the named insured of his or her possible\neligibility for automobile liability insurance coverage through the Kentucky\nautomobile assigned risk plan. The no tice shall accompany or be included in the\nnotice of cancellation or the notice of intent not to renew. The notice shall also\ninform the insured that he or she may, within seven (7) days, request the\ncommissioner in writing to determine whether there is su fficient reason to cancel or\nnot to renew the policy. Upon receipt of a request from the insured, the\ncommissioner may request additional information regarding the cancellation or\nnonrenewal of a policy from the insurer. An insurer shall respond to a reque st for\ninformation from the commissioner within seven (7) days from receipt of the\nrequest. Within fourteen (14) days of receiving a written request from the insured,\nthe commissioner shall send his or her findings to the insurer and to the insured. If\nan insurer fails to respond to a request for additional information within seven (7)\ndays from receipt of the request, the commissioner may make a finding in favor of\nthe insured. When he or she sends findings, the commissioner shall notify both\nparties of th eir right to request a hearing under KRS 304.2 -310(2)(b) and KRS\nChapter 13B. The party requesting the hearing shall give the commissioner written\nconfirmation of attendance at the hearing not more than five (5) days before, nor\nless than forty-eight (48) hours before, the scheduled hearing. If the requesting party\nfails to give the required written confirmation, the commissioner shall cancel the\nhearing.\n(12) The reason for nonrenewal or cancellation shall accompany or be included in the\nnotice of nonrenewal or cancellation.\n(13) Except where the maximum limits of coverage have been purchased, every notice of\nfirst renewal shall include a provision or be accompanied by a notice stating in\nsubstance that added uninsured motorists, underinsured motorists, and  personal\ninjury protection coverages may be purchased by the insured.\n(14) There shall be no liability on the part of and no cause of action of any nature shall\narise against the commissioner or against any insurer, its authorized representative,\nits agen ts, its employees, or any firm, person, or corporation furnishing to the\ninsurer information as to reasons for cancellation or nonrenewal, for any statement\nmade by any of them in any written notice of cancellation or nonrenewal, or in any\nother communicat ion, oral or written, specifying the reasons for cancellation or\nnonrenewal, or the providing of information pertaining thereto, or for statements\nmade or evidence submitted at any hearings conducted in connection therewith.\n(15) (a) If the commissioner de termines that an insurer has violated any provision of\nthis section, the commissioner may require the insurer to:\n1. Accept the application or written request for insurance coverage at a rate\nand on the same terms and conditions as are available to other r isks\nsimilarly situated;\n2. Reinstate insurance coverage to the end of the policy period; or\n3. Continue insurance coverage at a rate and on the same terms and\nconditions as are available to other risks similarly situated.\n(b) As to any person who has viol ated any provisions of this section, the\ncommissioner may:\n1. Issue a cease and desist order to restrain the person from engaging in\npractices that violate this section;\n2. Suspend or revoke the person's license or certificate of authority;\n3. Assess a civ il penalty against the person in accordance with KRS\n304.99-020; or\n4. Take any combination of the actions specified in this paragraph.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=40552","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:50Z","sha256":"5abe629c8579b6b3047836b292ebb06be7bb3a31e5f2bd6ef4260cb56c4efe6b","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.20-037","next":"us-ky/krs-304.20-041"},"notice":"GroundRules: Original legal text. Not legal advice."}