Vehicle Appraisal & Insurance Valuation in Kentucky

806 KAR 12:095 is Kentucky's primary administrative regulation governing first-party automobile total-loss settlement methodology. The regulation establishes how insurers must determine the value of a total-loss vehicle in applicable first-party physical-damage claims.

Under 806 KAR 12:095, total-loss valuation methods include the use of comparable replacement vehicles available in the local market, dealer quotations, and statistically valid valuation sources. The regulation addresses condition adjustments, enhancement and betterment considerations, and the documentation required to support adjustments.

Under 806 KAR 12:095, Section 7(1)(b), when the cash equivalent method is used, the settlement must include all applicable taxes, license fees (if these fees cannot be refunded by the Transportation Cabinet), and other fees incident to transfer of evidence of ownership of a comparable motor vehicle. The same requirement applies under the replacement vehicle method under Section 7(1)(a). These fees are required by the regulation.

806 KAR 12:095, Section 7(1)(b)6 establishes a specific mechanism that applies when there is no appraisal provision in the insurance contract. Under that provision, if an insured presents two independent appraisals — based on measurable and discernible factors — that support a higher local-market cash value than the database valuation used by the insurer, the insurer must consider that local-market value in determining actual cash value.

This provision is distinct from invoking a contractual appraisal clause. It does not require that an appraisal clause exist in the policy; it operates as a regulatory mechanism for challenging a database-based valuation with independent local-market evidence. Presenting two qualifying appraisals does not automatically control the settlement or guarantee a higher payment — the insurer must consider the local-market value, but the regulation does not eliminate the insurer's obligation to evaluate the evidence.

The two appraisals must be based on measurable and discernible factors supporting the higher local-market cash value. The specific requirements and procedures are set out in the current text of 806 KAR 12:095. Whether this provision applies to a specific claim depends on the facts, the policy terms, and the current regulatory text.

806 KAR 20:030 became effective February 3, 2026. This regulation addresses valuation standards within its applicable regulatory scope. It identifies certain valuation guides — including Kelley Blue Book and J.D. Power/NADA — as recognized sources within that scope.

806 KAR 20:030 applies to retail-value determinations under KRS Chapter 186A within its defined scope. It does not establish KBB or NADA as mandatory for every Kentucky insurance valuation, and it is not a universal requirement to calculate all insurance settlements using only those guides. Its applicability depends on the specific facts and the regulation's defined scope.

ACV in Kentucky is the fair market value of the vehicle immediately before the loss. Kentucky's regulated valuation framework requires the use of comparable replacement vehicles, local market evidence, and documented adjustments for condition, mileage, and equipment differences.

An independent appraisal can examine the same evidence — comparable vehicles, market data, condition, mileage, equipment — and develop an objective opinion of value. Depending on the evidence, an independent appraisal may produce a value that is higher, lower, or similar to the insurer's valuation.

In addition to the regulatory framework, the applicable insurance policy may contain an appraisal clause. A policy appraisal clause allows each party to select an independent appraiser when there is a disagreement about the amount of a loss. If the appraisers cannot agree, they select an umpire. The appraisal process addresses the amount of the loss — not coverage questions.

Kentucky's 2026 legislation amended KRS 304.9-4331, including provisions that impose a two-year restriction on public-adjuster settlement negotiations beginning July 15, 2026. Public adjusters and independent vehicle appraisers are distinct roles with different regulatory frameworks.

A1 Auto Appraisals provides independent vehicle appraisal services — developing an objective opinion of vehicle value and, where applicable, communicating with the opposing appraiser in an appraisal clause proceeding. A1 does not act as a public adjuster. Availability of appraisal services in Kentucky is subject to applicable policy terms, jurisdiction, and licensing requirements.

Whether the 2026 amendments to KRS 304.9-4331 affect independent vehicle appraisal in a specific context — including appraisal-clause work — is a question that may require confirmation from the Kentucky Department of Insurance or qualified legal counsel. A1 does not represent that appraisal-clause work is categorically exempt from those provisions, nor that it is categorically prohibited. Parties with questions about the applicability of KRS 304.9-4331 to a specific engagement should seek guidance from the Kentucky DOI or a qualified attorney.

For third-party vehicle property damage claims in Kentucky, the applicable measure of damages is governed by Kentucky law and the specific facts of the case. Whether diminished value is recoverable in a third-party claim depends on applicable Kentucky authority and the circumstances of the claim.

First-party physical-damage coverage and third-party liability damages are distinct legal frameworks. Whether a specific Kentucky claim supports a diminished-value recovery depends on the applicable policy, the type of claim, and the facts. Questions about legal entitlement should be directed to a qualified attorney in Kentucky.