The issue of late notice has plagued both insurers and policy holders for time immemorial. Historically, in most contexts, New York law did not require insurers to demonstrate prejudice before disclaiming coverage based on late notice of an occurrence or suit. New York joined the majority of jurisdictions when it enacted new legislation compelling an insurer to demonstrate prejudice for policies issued on or after January 17, 2009.
With this background in mind, we examine the tragic case of a 22 year old woman who sustained seemingly catastrophic injuries as a result of a motorcycle accident where the adverse vehicle was uninsured. [i]Waldron v. New York Central Mutual Life, et al[/i]. The policyholder – the father of the injured woman – first provided notice of the accident two months later to an agent of the insurer but indicated that he did not want to file a formal SUM claim at that time. Five months after the accident, he changed his mind and advised the agent to file a claim with his auto insurer that denied it based upon, among other reasons, late notice of the claim.
The old saying, “bad cases make bad law” was never truer than in a claim where a father excuses his delayed reporting because he was distraught over his daughter's condition who was being cared for out of state. In W[i]aldron[/i], the Appellate Division, the Third Department throws the plaintiff a lifeline, finding an issue of fact on the timeliness of the notice to the insurer. We caution insurers that even when mathematical calculations support a strong late notice defense, the merits of an underlying claim may exert subtle pressure on a court to arrive at a "preferred" result.
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