dissenting.
I respectfully dissent from the majority opinion because the $500 medical benefit paid to Lawson by his insurer, Kentucky Farm Bureau Mutual Insurance Company, qualifies as an “added reparation payment” for the purposes of KRS 304.39-230(6).
As correctly noted by Court of Appeals Judge Emberton in his dissenting opinion, the intent of KRS 304.39-020 is that the payment of medical expenses is a reparation benefit. The statute states in pertinent part that:
As used in this subtitle:
(1) “Added reparation benefits” mean benefits provided by optional added reparation insurance.
(2) “Basic reparation benefits” mean benefits providing reimbursement for net loss suffered through injury arising out of the operation, maintenance or use of a motor vehicle, subject, where applicable, to the limits, deductibles, exclusions, disqualifications and other conditions provided in this subtitle. The maximum amount of basic reparation benefits payable for all economic loss resulting from injury to any one (1) person as the result of one (1) accident shall be ten thousand dollars ($10,000), regardless of the number of persons entitled to such benefits or the number of providers of security obligated to pay such benefits. Basic reparation benefits consist of one (1) or more of the elements defined as “loss.”
Regarding limitations, KRS 304.39-230 states in relevant part:
(6) An action for tort liability not abolished by KRS 304.39-060 may be commenced not later than two (2) years after the injury, or the death, or the last basic or added reparation payment made by any reparation obligor, whichever later occurs.
The real question in this case is how we characterize the $500 no-fault medical ben*62efit. There is nothing in the statute to suggest that an added medical benefit from a no-fault policy must be expressly designated as a reparation benefit in order to meet the statutory requirement. Case law is also silent on this question.
Fann v. McGuffey, Ky., 534 S.W.2d 770 (1975), interpreting the statute makes no specific mention of a reparation benefit payment. It indicates that the payment must be a “no fault” benefit payment expressed as follows:
An action for tort recovery not foreclosed by KRS 304.39-060, must be commenced within two years after the injury or death or after the last payment of no-fault benefits, whichever is later.
It is well settled that the MVRA is to be liberally interpreted in favor of the accident victim. Troxell v. Trammell, Ky., 730 S.W.2d 525 (1987). In addition, contracts of insurance are to be liberally construed in favor of the insured. State Auto Mutual Ins. Co. v. Ellis, Ky.App., 700 S.W.2d 801 (1985). This rule of liberal construction applies to the MVRA as well as to statutes of limitation. See Plaza Bottle Shop, Inc. v. Al Torstrick Ins. Agency, Inc., Ky.App., 712 S.W.2d 349 (1986); Troxell v. Trammell, supra, at 528.
This Court has stated that the plain meaning of the statute is that a person has two years after the last payment of benefits in which to file an action for tort liability without regard to whether such benefits were first claimed or first paid within two years of the date of injury. Milby v. Wright, Ky., 952 S.W.2d 202 (1997); Crenshaw v. Weinberg, Ky., 805 S.W.2d 129 (1991). The Act is to be interpreted to promote the intent of the legislature to encourage motor vehicle accident victims to look first to their no fault benefits and then to pursue a tort claim if necessary. See Bailey v. Reeves, Ky., 662 S.W.2d 832 (1984); Crenshaw, supra.
Lawson brought this action within two years of the last payment of medical expenses related to the accident. The controversy here is whether these medical payments were not reparation payments because Farm Bureau labeled them as “medical expense payments” and not as reparation payments. The issue is whether an insurance company can control whether payments are classified as reparations under the MVRA by calling them something other than reparation payments in the insurance policy.
The position taken by the majority opinion erroneously combines definitional terms contained in KRS 304.39-020 with non-definitional terms found in KRS 304.39-140. The latter states that, if requested, the benefits must be provided in increments of $10,000. Clearly, this is a requirement for the insurer to follow and is not intended to harm the insured. We must also observe that this section is silent as to benefits provided voluntarily and in less than $10,000 increments, In other words, the statute does not state that if benefits are not requested, then any benefits provided shall be deemed non-reparation benefits. Thus, it was permissible for Farm Bureau to provide added reparation benefits that were not requested in whatever increments it chose.
We have previously held that an insurance policy’s terms, conditions and exclusions cannot eliminate an item of coverage which the Act requires upon request. See State Farm Mutual Automobile Insurance Co. v. Mattox, Ky., 862 S.W.2d 325 (1993). An insurance company cannot abrogate the provisions of the MVRA by means of the language it uses in the policy. Gordon v. Kentucky Farm Bureau Ins. Co., Ky., 914 S.W.2d 331 (1996), determined that the one-year limitations period in a Farm Bureau policy was invalid and held that the 15 year limitations period for contract actions applied. AlthoughMihe court observed that the company could contract for less than a 15 year limitation, such period would have to be at least two yearskbased on the MVRA as interpreted in Elkins v. Ky. Farm Bureau Mutual Ins. Co., Ky. App., 844 S.W.2d 423 (1992). No automo*63bile insurance company in Kentucky is permitted to limit the coverage provided by the MVRA by the use of terms, conditions and exclusions in an insurance policy.
The medical benefit payments made by Farm Bureau were reparation benefits, or no-fault payments, under the Act. The first $10,000 and the last $500 in payments were indistinguishable because they were all reparation benefit payments. Lawson should not to be denied his right to recovery through construction of the Act which is a detriment to the accident victim and through a restrictive construction of an insurance policy against the insured. The opinion of the Court of Appeals should be reversed and the decision of the trial court should be affirmed so as to reinstate the jury verdict in favor of Lawson.
LAMBERT, C.J., and STUMBO, J., join in this dissent.