New York law requires all drivers to maintain policies of auto insurance with specific amounts of coverage. Since many drivers do not have the required insurance, state law also requires auto insurance policies to include uninsured motorist (UM) coverage. Underinsured motorist (UIM) coverage is optional under state law. In order for this system to work, the various parties must communicate with one another. An injured party must provide a notice of claim to the insurance carrier of the allegedly responsible party. If an insurance carrier disclaims or limits coverage, they must give notice to their policy holder and the injured person. These notices must be given within a “reasonable” amount of time. The precise meaning of “reasonable” is a matter of ongoing dispute.
Section 3420(f)(1) of the New York Insurance Law (NYIL) requires drivers to have maximum liability insurance coverage for a single auto accident in specific amounts. This provides compensation to others when the insured is at fault in an auto accident. State law also requires auto insurance policies to provide UM coverage in the same amounts. This applies when the insured suffers injuries caused by a driver who is not insured. UIM coverage applies when the at-fault driver’s insurance coverage is insufficient to cover the amount of damage they caused.
In order to make a UM or UIM claim, an injured person must notify their own insurance company of the accident, and of the other driver’s lack of coverage. The injured person must also provide evidence of the other driver’s fault. Before the injured party can notify their own insurer, however, they have to know that the at-fault party’s insurer is disclaiming or denying coverage. This assumes, of course, that the at-fault party has insurance coverage in the first place, and that they have notified their insurer of the claim. NYIL § 3420(d)(2) requires an insurer that is disclaiming or denying coverage to “give written notice as soon as is reasonably possible” to its insured and the injured party.
In a 2014 case, the New York Court of Appeals held that the notice requirement in § 3420(d)(2) specifically applies in cases of bodily injury or death resulting from auto accidents. It further held that a failure to provide timely notice could result in waiver of the insurer’s right to disclaim coverage. Since the injuries at issue in that case did not result from an auto accident, the court did not rule definitively on the question.
A 2018 decision by the First Department of the New York Appellate Division addressed consequences for failing to meet this notice requirement by an insurer. The court found that the insurance company’s disclaimer, sent forty-five days after receipt of the claim, was untimely. It affirmed a lower court order holding that the insurance company was “obligated to defend and indemnify” certain defendants.
Auto accidents can cause severe and debilitating injuries, or even death. No matter the circumstances of your particular accident, the New York car accident attorneys at the Law Office of Mark A. Siesel are available to answer your questions, address your concerns, and discuss your legal rights and options. Please contact us today at 914-428-7386 or online to schedule a free consultation with a member of our team.