N.Y. Court Awards No-Fault Damages Despite Late Notice to Insurer

A New York trial judge has dealt a blow to New York State’s timely insurance no-fault auto insurance notice requirement, under which insurers can deny coverage if a claim is not filed within a set period.

Following a trial before the Acting Supreme Court Justice Jeffery G. Berry, a no-fault policyholder has been awarded past medical expenses, lost wages and attorneys’ fees after the court granted summary judgment holding that her no-fault insurance company, Travelers Property Casualty Corporation, wrongfully denied her no-fault benefits on the grounds of late notice. The policyholder failed to file a claim within the prescribed period only because she was the victim of a hit-and-run and was informed by her agent that no claim could be filed until the other driver was identified, according to the trail record.

Judge Berry held that the plaintiff had “reasonable ground” for failing to submit timely notice and that her insurance policy therefore remained in force.

The case, Alison C. Manges v. Travelers Property Casualty Corp., No. 1036/00, was heard in New York Supreme Court, Orange County, and handed down on Aug. 18, 2005.

On Jan. 7, 1997, the no-fault policyholder’s car was struck by another car on the Palisades Parkway. The driver of the car that struck the policyholder’s left the scene of the accident and therefore the policyholder was unable to obtain the other driver’s insurance information. That same day, the policyholder reported the accident to the Travelers’ agent from whom she had purchased the insurance policy. The agent said that she could not help file the claim unless the policyholder could obtain the other driver’s insurance information.

On Jan. 3, 1998, one year after the accident, the policyholder obtained hit-and-run driver’s information and promptly provided the information to her agent. The no-fault claim for medical expenses and loss of wages was then submitted to Travelers.

Travelers denied the policyholder’s claim for no-fault insurance coverage on the basis of lack of timely notice, pursuant to the New York no-fault regulation 11 NYCRR §65.12, because notice was not given within 90 days.

The policyholder then contacted a Travelers’ claim handler to dispute her denial and explain her circumstances. After a review of all information concerning the uniqueness of this no-fault claim, Travelers continued to deny no-fault insurance coverage.

In February 2000, the policyholder filed a lawsuit seeking, among other things, damages stemming from Travelers’ wrongful denial of no-fault insurance coverage. After five years of litigation, the policyholder submitted a motion to strike Travelers late notice defense.

The no-fault regulation in place at the time of Travelers’ denial required that a policyholder seeking no-fault insurance coverage notify the insurance company as soon as reasonably practicable, but in no event more than 90 days after the date of the accident, unless the eligible injured person submitted written proof that it was impossible to comply. The regulation reads in part:

Notice. In the event of an accident [notice shall be given] as soon as practicable, but in no event more than 90 days after the date of the accident, unless the eligible injured person submits written proof that it was impossible to comply with such time limitation due to specific circumstances beyond such person’s control.

Based upon this regulation, the court, by order dated July 25, 2003, ruled that the policyholders’ notice of claim was timely under the circumstances:

“Plaintiff, through no-fault of her own, was unable to submit the information requested by her insurance agent and, accordingly, did not submit a formal no-fault claim until January, 1998, when she became aware, for the first time, of the identity and insurance coverage of the owner of the other vehicle. Under these circumstances, plaintiff was unable to comply with the strict requirements of 11 NYCRR Part 65. However, plaintiff submitted the claim for no-fault coverage as soon as the requested information became known to her. Plaintiff asserted a reasonable ground for failing to submit a timely written notice of her claim, to wit:, her inability to ascertain the identity of the owner of the other vehicle and insurance information concerning same. Furthermore, Plaintiff did give her insurance agent Tuthill Agency, prompt Notice of the motor vehicle accident.”

Following this ruling, Travelers requested a trial regarding her damages.

The court awarded the policyholder all incurred medical expenses and loss of wages, as well as attorney’s fees and expenses. The award for medical expenses and loss of wages is subject to interest, pursuant to New York Insurance law 5106(a), at two percent per month until paid.

Brian T. Valery and Eugene R. Anderson, attorneys at Anderson Kill & Olick, P.C, represented the policyholder.