In the well known Rova Farms decision, the New Jersey Supreme Court held that a liability insurer who in bad faith refuses to accept a plaintiff’s reasonable settlement demand, will be liable for the amount of any judgment above and beyond the insured’s policy limits. In an opinion approved for publication on June 30, 2008, the Appellate Division held that a UM carrier cannot be exposed to Rova Farms liability in refusing to settle with an insured. The court in Taddei v. State Farm, was faced with a case where the plaintiff/insured made a settlement demand after non-binding UM arbitration of $87,500. A jury eventually awarded the plaintiff $2.6 million. However, the trial judge molded the verdict to the $100,000 policy limit. On appeal , the plaintiff argued that the carrier had acted in bad faith, in light of the refusal to settle. The Appellate Division was un-persuaded, reasoning that the Rova Farms bad faith model is inapplicable in the UM and UIM context because the insured is the claimant and, therefore, not exposed to an award in excess of the policy limit.