Kentucky Revised Statutes

Ky. Rev. Stat. § 190.033 (2026)

Insurance or bond required of licensees -- Exemption

✓ current as of May 2026

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(1) Except as provided in subsection (4) of this section, a motor vehicle dealer's license, new recreational vehicle dealer's license, motor vehicle auction dealer's license, or wholesaler's license shall not be issued or renewed unless the applicant or holder of the license has on file with the commission an approved indemnifying bond or insurance policy that complies with subsection (2) of this section.

(2) An indemnifying bond or insurance policy shall:

(a) Be issued by:

1. A surety company or insurance carrier authorized to transact business within the Commonwealth of Kentucky; or

2. A nonadmitted insurer in accordance with the requirements of Subtitle 10 of KRS Chapter 304;

(b) Have a term that is continuous and remains in full force until canceled under proper notice;

(d) For all dealers except automotive recycling dealers, provide public liability and property damage coverage for the operation of any vehicle owned or being offered for sale by the dealer or wholesaler when being operated by the owner or seller, his or her agents, servants, employees, prospective customers, or other persons. In circumstances where a customer's or other person's vehicle is out of use because of breakdown, repair, or servicing and a motor vehicle is loaned, with or without consideration, the coverage mandated by this section shall be in excess of, and be deemed secondary to, the collision, bodily injury, and property damage liability coverage under a customer's or other person's own coverage for that person's own negligence; otherwise the coverage mandated by this section shall be primary;

(e) Provide that the amount of coverage under the bond or policy is two hundred fifty thousand dollars ($250,000) for bodily injury or death of any one (1) person; five hundred thousand dollars ($500,000) for bodily injury or death in any one (1) accident; and two hundred fifty thousand dollars ($250,000) property damage;

(f) For automotive recycling dealers, provide commercial general liability coverage in the amount of two hundred fifty thousand dollars ($250,000) for bodily injury or death of any one (1) person; five hundred thousand dollars ($500,000) for bodily injury or death in any one (1) accident; and two hundred fifty thousand dollars ($250,000) property damage; and

(g) Provide that the bond or policy shall not be canceled unless fifteen (15) days' notice by the bondsman or insurance carrier has been given in writing to the commission.

(3) (a) Upon the cancellation of any required indemnifying bond or insurance policy, the right to engage in the business of a motor vehicle dealer or wholesaler shall immediately abate.

(b) If the bond or insurance policy is reinstated within thirty (30) days from the date of cancellation, the rights granted by the license shall again be in force and effect; otherwise, the license shall become void.

(4) A dealer that has a certificate of authority from the Department of Insurance demonstrating proof of self-insurance is exempt from this section. Effective: June 27, 2025 History: Amended 2025 Ky. Acts ch. 12, sec. 1, effective June 27, 2025. -- Amended 2014 Ky. Acts ch. 27, sec. 17, effective January 1, 2015; and ch. 83, sec. 2, effective July 15, 2014. -- Amended 2002 Ky. Acts ch. 83, sec. 1, effective July 15, 2002. -- Amended 1996 Ky. Acts ch. 111, sec. 2, effective July 15, 1996. -- Amended 1992 Ky. Acts ch. 452, sec. 3, effective July 14, 1992. -- Amended 1988 Ky. Acts ch. 65, sec. 2, effective July 15, 1988. -- Amended 1982 Ky. Acts ch. 373, sec. 4, effective July 15, 1982. -- Created 1966 Ky. Acts ch. 175, sec. 13.

Notes of Decisions

Cited in 11 cases, 1977–2012 · leading case: Empire Fire & Marine Ins. Co. v. Haddix, 927 S.W.2d 843 (Ky. Ct. App. 1996).

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Empire Fire & Marine Ins. Co. v. Haddix, 927 S.W.2d 843 (Ky. Ct. App. 1996). · cites it 12× “The court held that the mandated insurance coverages for automobile dealers found in KRS 190.033 could not be circumvented by an escape clause when the contest is “between an insurance company and a member of the public-” Id.”

Nantz v. Lexington Lincoln Mercury Subaru, 947 S.W.2d 36 (Ky. 1997). · cites it 2× “39-010(1) and KRS 190.033, for this Court to require dealers to honor the duties imposed on them within KRS 186A, as well as to further require them to take on the statutory responsibilities clearly left to the buyer, would not only circumvent the intent of our legislature, but…”

Motorists Mut. Ins. Co. v. Grange Mut. Cas. Co., 149 S.W.3d 437 (Ky. Ct. App. 2004). · cites it 7× “” 12 However, it appears that KRS 190.033, which sets forth the required minimum liability insurance for motor vehicle dealers, such as Autorama, is controlling.”

Kentucky Farm Bureau Mut. Ins. Co. v. Shelter Mut. Ins. Co., 326 S.W.3d 803 (Ky. 2010). “2004) (“Unlike the escape clause at issue in Royal-Globe, the provision in Motorist Mutual’s policy limiting coverage to “bodily injury” clearly does not provide coverage for property damage as required by KRS 190.033.”). However, we are compelled to our contrary position by our…”

Royal-globe Ins. v. Safeco Ins. Co., 560 S.W.2d 22 (Ky. Ct. App. 1977). · cites it 8× “KRS 190.033 provides: The bond or policy shall provide public liability and property damage coverage for the operation of any vehicle owned or being offered for sale by the said dealer or wholesaler when being operated by the owner or seller, his agents, servants, employes,…”

Royal-Globe Ins. Companies v. Safeco Ins. Co. of Am., 560 S.W.2d 22 (Ky. Ct. App. 1977). · cites it 7× “KRS 190.033 provides: The bond or policy shall provide public liability and property damage coverage for the operation of any vehicle owned or being offered for sale by the said dealer or wholesaler when being operated by the owner or seller, his agents, servants, employes,…”

Easterling v. Man-O-War Auto., Inc., 223 S.W.3d 852 (Ky. Ct. App. 2007). · cites it 3× “Easterling first argues that Man-O-War violated KRS 190.033 when it failed to provide liability coverage on the vehicle.”

Calhoun v. Provence, 395 S.W.3d 476 (Ky. Ct. App. 2012). “220(5) because Yaden’s Auto Sales — in its capacity as buyer — was required to have insurance under KRS 190.033. As the trial court correctly noted, the purchaser in Gainsco did in fact have insurance, but this did not affect the seller’s duty to comply with the statutory…”

State Farm Mut. Auto. Ins. Co. v. Register, 583 S.W.2d 705 (Ky. Ct. App. 1979). “490 or KRS 190.033. The purpose of these statutes is to protect members of the public and when that protection is provided the purpose of the statute is satisfied.”

Mitchell v. Kentucky Farm Bureau Mut. Ins. Co., 927 S.W.2d 343 (Ky. 1996). “The Court of Appeals admitted that this type of case demonstrated that it is possible for uninsured vehicles to be operated for extended periods of time despite the public policy expressed in KRS 304.”

Omni Ins. Co. v. Kentucky Farm Bureau Mut. Ins. Co., 999 S.W.2d 724 (Ky. Ct. App. 1999). “39-010(1) and KRS 190.033, for this Court to require dealers to honor the duties imposed on them within KRS 186A, as well as to further require them to take on the statutory responsibilities clearly left to the buyer, would not only circumvent the intent of our legislature, but…”

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