Bishop v. Allstate Ins. Co., 80-SC-790-DG
| Decision Date | 01 September 1981 |
| Docket Number | No. 80-SC-790-DG,80-SC-790-DG |
| Citation | 623 S.W.2d 865 |
| Parties | Ruth Ann BISHOP and John Franklin Bishop, Movants, v. ALLSTATE INSURANCE COMPANY, Respondent. |
| Court | United States State Supreme Court — District of Kentucky |
David Kaplan, Louisville, for movants.
C. Dant Kearns, Louisville, for respondent.
The issue is the validity of a family or household exclusion provision in an automobile insurance contract which eliminates the minimum security coverage for tort liability required by Kentucky's Motor Vehicles Reparations Act (MVRA), KRS 304.39-010 et seq. We conclude that such an exclusion provision is invalid because it effectively renders a motor vehicle owner or operator uninsured and thereby violates the legislatively mandated public policy of compulsory insurance.
Ruth Ann Bishop was injured in a single-vehicle automobile accident in which she was the sole passenger and her husband, John Franklin Bishop, was the driver. At the time of the accident John Franklin carried an automobile insurance policy with Allstate Insurance Company which contained a provision excluding liability coverage for bodily injury to relatives of the insured residing in his household. On the basis of this "family" or "household" exclusion provision Allstate filed a motion for a judgment on the pleadings denying both tort liability to Ruth Ann and a duty to defend on behalf of John Franklin. The trial court granted Allstate's motion.
The Bishops appealed to the Court of Appeals which upheld the validity of the family exclusion provision in the insurance contract, notwithstanding Kentucky's MVRA which requires a motor vehicle owner or operator to procure insurance covering basic reparation benefits (BRB) and legal liability arising out of the operation of his motor vehicle. The court reasoned that the family exclusion provision was valid because (1) it did not affect BRB; (2) family exclusion provisions in insurance contracts were upheld by this Court after the abolition of interspousal immunity and the legislature was aware of such permissible limitations when it adopted Kentucky's MVRA in 1974; and (3) the Commissioner of Insurance approved the terms of the contract in question as provided by KRS 304.39-150. We granted discretionary review of the decision of the Court of Appeals which we now reverse.
By enacting the MVRA the legislature established for the first time a system of compulsory insurance for the owners and operators of motor vehicles in Kentucky. Fann v. McGuffey, Ky., 534 S.W.2d 770 (1975). The act mandates two types of coverage. It requires that motor vehicle owners and operators provide minimum security covering payment of no-fault BRB and payment of tort liability for personal injuries and property damage. Id. at 772. Therefore, the lack of effect of a family exclusion provision on BRB is irrelevant to the issue of its validity vis a vis tort liability. The language of the MVRA makes them two separate and distinct questions.
The specific language of the MVRA which sets out the nature and minimum security requirements of BRB and tort liability coverage is found primarily in three sections of the act. KRS 304.39-010(1) states without qualification that the policy and one of the purposes of the MVRA is "to require owners, registrants and operators of motor vehicles in the Commonwealth to procure insurance covering basic reparation benefits and legal liability arising out of ownership, operation or use of such motor vehicles." (Emphasis added.) KRS 304.39-080(5) reinforces the policy behind the MVRA by requiring that every motor vehicle owner or operator, with the exception of certain government agencies, provide, either by a contract of insurance or by qualifying as a self-insurer, security for payment of BRB and tort liabilities arising from maintenance or use of his motor vehicle. KRS 304.39-110(1) specifies the minimum amounts of coverage that a motor vehicle owner or operator must carry to fulfill these requirements. The minimum coverage for tort liabilities is $10,000 per person, $20,000 per accident for personal injuries and $5,000 for property damage. The minimum coverage for payment of BRB is $10,000. KRS 304.39-020(2).
We recognize that we upheld family exclusion provisions in insurance contracts prior to the enactment of the MVRA. Allen v. West American...
To continue reading
Request your trial
-
Progressive Northern Ins. Co. v. Corder, No. 98-SC-0392-CL.
...of a contractual exclusion from minimum liability coverage. Such an exclusion was held to be improper in Bishop a. Allstate, Ky., 623 S.W.2d 865, 866 (1981), because it contravened the purpose of compulsory automobile insurance, which is "to assure that a driver be insured to a minimum leve......
-
Meyer v. State Farm Mut. Auto. Ins. Co., s. 82SC155
...be in violation of the legislatively mandated public policy of compulsory liability insurance required by the Act. Bishop v. Allstate Insurance Co., 623 S.W.2d 865 (Ky.1981). Nowhere in the Act is an insurer permitted to exclude family and household members from coverage under its liability......
-
National County Mut. Fire Ins. Co. v. Johnson
...Farmers Ins. Group v. Reed, 109 Idaho 849, 712 P.2d 550 (1985); DeWitt v. Young, 229 Kan. 474, 625 P.2d 478 (1981); Bishop v. Allstate Ins. Co., 623 S.W.2d 865 (Ky.1981); State Farm Mut. Auto. Ins. Co. v. Nationwide Mut. Ins. Co., 307 Md. 631, 516 A.2d 586 (1986); State Farm v. Sivey, 404 M......
-
Nation v. State Farm Ins. Co.
...have held it invalid only to the statutorily-required limits rather than to the extent of insurance coverage. See Bishop v. Allstate Ins. Co., 623 S.W.2d 865, 866 (Ky.1981) and Farmers Ins. Exchange v. Young, 108 Nev. 328, 331, 832 P.2d 376, 379 (1992). But to one degree or another, at leas......