MVRA as Exclusive Remedy in No-Fault Cases

April 24, 2006

Supreme Court recently published Foster v. Kentucky Farm Bureau, 2004-SC-0461-DG, which finally laid to rest the question of whether an insurer’s failure to pay no fault benefits would support a separate claim for bad faith. The Court held that the, “MVRA is a comprehensive act which not only relates to certain tort remedies, but also establishes the terms under which insurers pay no-fault benefits, and provides for the penalties to which insurers are subjected if they fail to properly pay no-fault benefits.” The Foster Court affirmed the trial court’s decision to dismiss the punitive damages claim under the Unfair Claims Settlement Practices Act. The Court also affirmed the trial court on its decision to send the question of “reasonableness” of withholding payment to the jury as a question of fact.

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