Auto insurers in Kentucky now have clearer direction — and legal protection — when determining the value of totaled vehicles. As of July 1, the state’s Department of Insurance (DOI) has mandated the use of either Kelley Blue Book or the J.D. Power valuation guide when settling total-loss claims.
The emergency regulation follows the passage of Senate Bill 136, enacted earlier this year on an expedited basis. According to a DOI bulletin issued recently, these two pricing sources are now the only nationally accepted guides insurers are authorized to use in Kentucky.
Chris Nolan, executive director of the Insurance Institute of Kentucky, told Insurance Journal the rule addresses an oversight stemming from J.D. Power’s 2017 acquisition of the National Automobile Dealers Association (NADA) Guides. Kentucky statutes had continued to reference the NADA system, creating confusion in the industry when those guides ceased independent publication.
The situation was compounded when the state Department of Revenue, tasked in 2024 with naming updated valuation references, failed to act. That left insurers operating without formal guidelines or legal safeguards.
SB 136 resolved this by shifting authority to the DOI, which concluded that Kelley Blue Book and J.D. Power were the only guides meeting the statute’s “nationally accepted” criteria. A spot check comparing the two sources found minimal variation: a 2024 Toyota Prius trade-in value was $24,701 with Kelley and $24,550 via J.D. Power.
Still, questions remain. Some insurers use other tools, such as CCC Intelligent Solutions, which are not recognized under the new regulation and have been subject to controversy in previous valuation disputes. Nolan said additional rulemaking may be required to address these alternatives.
A public hearing on the emergency rule is scheduled for Aug. 25, with written comments accepted through Aug. 31 via email at Shaun.Orme@ky. A second hearing is slated for Sept. 23 to discuss a permanent regulation that will replace the emergency rule upon its expiration.
