Suing Your Insurer in New York Just Got Easier

After years of litigation in the New York insurance industry, beginning January 2009, New York will abandon its often harsh rule permitting personal injury or wrongful death insurers to disclaim coverage on the ground that they did not receive timely “notice” of the claim without proof that there was some sort of harm or “prejudice” suffered by the insurer caused by the delay. [New York Insurance legislation, A11541/S8610]. This is good news for insurance customers throughout New York, who will now have some time to report claims against their insurance policies.

At Klose & Associates, we counsel our clients to promptly report any potential claims to the insurance company, thereby preserving any rights they may have under the insurance policy. Under the old rule– insurers could disclaim coverage based on a late filing of a claim. The courts did not care whether the insurance company suffered “prejudice” from the late notice of the claim, and looked only at whether there was a delay in reporting the accident. This sometimes meant that owners who legitimately did not know about a claim or potential claim were denied insurance coverage simply because the injured party failed to report the incident to the owner.

With the institution of this legislation, even the injured parties would be allowed to sue the insurer to determine the extent of responsible property or car owner’s insurance coverage, and to consider whether suits are worth pursuing. The law requires the insurance company to demonstrate that they were “materially prejudiced” by the delay in reporting the claim if the report was with the first two years after the accident. If the owner fails to report the claim within two years after the accident then the person owning the insurance policy will need to prove that the insurer was not prejudiced by the delay. Regardless, the argument will now be whether the insurance company was actually prejudiced by the delay in reporting the claim.

The legislation applies to personal injury or wrongful death coverage and not other kinds of insurance, such as property or health policies, and was made possible by recent rulings by New York’s highest court relaxing the “no prejudice”.

This does NOT mean that you should delay or post-pone reporting any accidents to your insurance company. For the owner that buries her head in the sand, hoping that no claim will be made, only buys potential litigation with the insurance company over the late notice. The bottom line, always report any accidents, and some near accidents, as soon as you know that someone was injured. If you really don’t know about the accident, you may still have the right to insurance even if you report the claim late.

If you have any questions or concerns about an accident that occurred on your property or with your motor vehicle, call your attorney at Klose & Associates. We routinely investigate insurance claims and determine whether you have the right to insurance coverage. At the same time, if your insurance company refuses to accept responsibility, you should immediately seek our insurance lawyer or litigation counsel.