Auto insurers in Kentucky now have some official guidance and liability protection when determining the value of wrecked vehicles.
In keeping with Senate Bill 136, approved on an emergency basis by state lawmakers this year, the Kentucky insurance commissioner last week posted bulletins reminding carriers that they must use the Kelley Blue Book or the J.D. Power value guidelines.
The new rule took effect July 1. A public hearing will be held Aug. 25 on the emergency rule change. Written comments will be accepted through Aug. 31 and can be sent via email to Shaun.Orme@ky. Another hearing is set for Sept. 23 to hear about a permanent rule change that will take effect after the emergency regulation expires.
It’s the latest turn in a story that began in 2017 when the National Automobile Dealers Association (NADA) Guides were purchased by J.D. Power, the analytics and ratings company. But Kentucky statutes had specifically named the NADA Guides as the system for insurers to use for valuations when settling claims, explained Chris Nolan, executive director of the Insurance Institute of Kentucky.
Lawmakers in 2024 attempted to adjust the law and tasked the state Department of Revenue with drafting new rules spelling out which guidebook that insurance carriers should use, going forward. But the DOR never got around to it, leaving insurers with no guidance and no cover when writing checks for damaged or total-loss vehicles.
This year, Kentucky lawmakers approved SB 136, directing the Department of Insurance to identify “nationally accepted car valuation guides” that can be used by insurers and insureds. DOI said in the bulletin last week that only two guides are considered nationally accepted.
Carriers may now utilize either the Kelley book or the J.D. Power guide, Nolan explained.
A check by Insurance Journal revealed very similar trade-in values from each guidebook for a 2024 Toyota Prius – $24,701 with the Kelley Blue Book and $24,550 with J.D. Power’s site.
Questions remain. Some insurance companies prefer to use other valuation guides, including the CCC Intelligent Solutions system, which has met with its own share of controversy. Further regulations from DOI may be needed, Nolan said.
The commissioner’s bulletin on the emergency regulation can be seen here.
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Carriers
Auto
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