Often referred to as “the assigned risk plan” the Kansas
Automobile Insurance Plan is the state’s residual market for individuals or
businesses who are unable to obtain coverage through the regular voluntary
The KAIP was established by the Kansas Legislature on
November 20, 1950 under KSA 40-2102 to provide private passenger auto liability
insurance to those unable to find coverage in the voluntary markets. Physical damage coverage was added to the
Plan later as the need arose. Today, KAIP
provides insurance coverage for private passenger autos, motor homes,
motorcycles, non-owners, and many other personal lines risks.
The Plan was amended in 1984 to provide coverage for
commercial autos. KAIP now insures
commercial autos and trucks, long-haul truckers, buses, taxis, limos, garage
risks such as auto dealers and service operations, drive-away contractors,
pizza delivery and other hired or non-owned risks.
Commercial risks are assigned to a servicing carrier under
contract with the Plan to process the business, issue the policies, and pay the
claims. Costs are then assessed to all
Kansas member companies under a pooling arrangement based upon commercial
volume written in Kansas.
Private passenger auto assignments are direct to the insurance
company and become that company’s book of business. The volume of applications assigned to a company and the costs
assessed annually to that company for KAIP operations are based upon that
company’s voluntary liability writings in Kansas to the state’s total voluntary
The Plan accepts applications from any agent licensed to
write property and casualty insurance in Kansas. Persons needing personal or commercial insurance should be able
to rely on any Kansas agent (also referred to as Producer) for help securing
insurance through the Plan. Agents are
expected to maintain an up-to-date manual of KAIP rules and rates and KAIP
application forms. The producing agent
is expected to assist the insured with policy changes, claim reporting, and all
normal duties expected of an agent.
The Plan is administered by a nine member Governing Board
appointed by the Commissioner of Insurance.
Five members are representatives of insurance companies admitted and
writing in Kansas, two members are licensed independent insurance agents, and
two members represent the general public.
A Plan manager is employed by the Governing Committee (Board) to manage
the daily affairs of the Plan. The
Committee meets three times each year with the fall meeting designated as the
Member companies are assessed a share of the Plan’s
annual operating budget which is prepared by the Plan manager and approved by
the Governing Committee during the fall annual meeting. The assessment is determined as a percentage
of the member company’s private passenger auto liability writings to the
state’s total writings with a minimum fee assessed to all admitted members.
HISTORY OF THE PLAN
Known initially as the Kansas Automobile Assigned Risk
Plan, the Plan officially began business in 1951 under KSA 40-2102. The Act empowered the Kansas Insurance
Commissioner to establish a plan of involuntary insurance for persons unable to
find coverage in the voluntary markets.
The Act required insurers licensed and writing auto liability in Kansas
to provide an involuntary plan of insurance for the otherwise uninsurable and
that those member companies be assessed for the financial operation of the Plan
based upon the volume of voluntary auto liability insurance written compared to
the state’s total voluntary writings.
Thus, this non-profit entity is looked upon as a quasi governmental
agency/private enterprise undertaking.
All admitted companies were required to subscribe to the
Plan through Insurance Commissioner Frank Sullivan’s office by September 8,
Initially, Kansas statutes required liability
insurance limits of $5,000/$10,000 bodily injury and $5,000 property damage on
all registered autos.
Notable Events in KAIP History:
January 1, 1958
The state’s Financial Responsibility Law went into effect.
July 1, 1965
The Kansas legislature raised mandatory bodily injury and property damage
limits to $10,000/20,000/5,000. Pickup
trucks were defined as private passenger autos.
July 1, 1968
Uninsured motorists coverage was authorized by statute on a voluntary basis.
January 1, 1974
The Kansas Automobile Injury Reparations Act, commonly known as “the
No-Fault law”, was enacted by the Kansas legislature as a means for
compensating persons promptly for accidental bodily injury arising out of the
ownership, operation, maintenance or use of a motor vehicle in Kansas.
This act also defined the conditions under which a lawsuit could be filed
for pain and suffering. Personal
Injury Protection (PIP) were defined.
Mandatory bodily injury and property damage limits of
$25,000/50,000/10,000 became law.
July 1, 1981
Uninsured motorists coverage was made mandatory.
January 1, 1984
The Kansas Automobile Insurance Plan was amended to provide coverage for commercial risks.
January 1, 1951 to July 1, 1960
July 1, 1960 to July 1, 1973
July 1, 1973 to January 1, 1977
January 1, 1977 to December 1, 1978
December 1, 1978 to March 15, 1991
February 11, 1991 to May 5, 2006
May 6, 2006 to present