Does BRB coverage come before med pay coverage in an auto policy? The answer made a difference to whether the statute of limitations had lapsed on a tort claim in Cole v. Fagin, No 2012-CA-797 (April 19, 2013), where the Court of Appeals ruled that BRB coverage came first and reversed a summary judgment.
Susan Cole was wise and bought plenty of auto insurance; she had a policy with Grange Insurance that included $10,000 in basic reparations benefits (BRB) coverage, $5000 in Med Pay as well as underinsured and uninsured motorist coverages. She was injured in an auto accident on July 1, 2009, and received treatment for injuries at a hospital. Grange mailed her a BRB application the next day. A week later, Grange's adjuster wrote Cole's lawyer and informed him that "payment for her medical expenses" would be under the Med Pay coverage "since there is a one year statute on that coverage." Cole later mailed the adjuster her completed BRB application. There was some further correspondence between Cole and Grange but, according to the Court of Appeals, "nothing else in the record ... indicates what coverage the parties was being utilized while Grange was paying Cole's medical expenses from August 6, 2009 to October 22, 2009, which totaled $3,976.57."
Cole filed suit on October 13, 2011, against Fagin for negligence and against Grange for only partially paying her claim for Med Pay and BRB benefits under her policy. Both Fagin and Grange moved to dismiss on statute of limitations grounds where the circuit court sustained.
The Court of Appeals framed the issue as follows: "whether Cole received $3,976.57 from Grange for her medical expenses due to her Med Pay or BRB coverage." The Court of Appeals reversed the circuit court finding that BRB coverage applied before Med Pay coverage and explained as follows:
An auto accident tort claimant "has no tort claim whatsoever for any element of damages to the extent that those damages have been paid, or could have been paid, through BRBs under her existing coverage." ... Because the MVRA requires Cole's accrued medical expense reimbursements of $3,976.57 to be considered BRBs at the end of any tort litigation, (i.e., for the purpose of determining her damages), to avoid absurdity it follows that the MVRA likewise requires Cole's accrued medical expense reimbursements of $3,976.57 to be considered BRBs at the beginning of any tort litigation (i.e., for the purpose of the statute of limitations codified at KRS 304.23-230)."Robert L. Abell