The Elasticity of Timely Notice -- Insured's One-Year Delay in Providing Notice of SUM Claim Found Reasonable

AUTO – SUM – LATE NOTICE – REASONABLE EXCUSE FOR DELAY
Matter of Progressive Northeastern Ins. Co. v. McBride
(2nd Dept., decided 8/18/2009)

Claimant did not notify his auto insurer of his supplementary uninsured motorists (SUM) coverage claim until approximately one year after the accident in which he allegedly was injured.  Progressive denied SUM coverage based on the claimant's late notice, and the claimant demanded arbitration.  Progressive commenced this special proceeding to stay that arbitration, and Supreme Queens denied Progressive's petition.

In AFFIRMING the lower court's judgment which denied that part of Progressive's petition that had sought a permanent stay of the SUM arbitration, the Second Department, Appellate Division, held:

In the context of supplemental uninsured/underinsured motorist (hereinafter SUM) claims, it is the claimant's burden to prove timeliness of notice, which is measured by the date the claimant knew or should have known that the tortfeasor was underinsured (see Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, 93 NY2d 487, 495; Matter of Assurance Co. of Am. v Delgrosso, 38 AD3d 649; Matter of State Farm Mut. Auto. Ins. Co. v Linero, 13 AD3d 546; Matter of Continental Ins. Co. v Marshall, 12 AD3d 508; State Farm Mut. Auto. Ins. Co. v Sparacio, 297 AD2d 284, 285). Timeliness of notice is an elastic concept, the resolution of which is highly dependent on the particular circumstances (see Matter of Metropolitan Property & Cas. Ins. Co. v Mancuso, 93 NY2d at 494-495; Mighty Midgets v Centennial Ins. Co., 47 NY2d 12, 19; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 441; Morris Park Contr. Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa., 33 AD3d 763, 764-765). In determining whether notice was timely, factors to consider include, inter alia, whether the claimant has offered a reasonable excuse for any delay, such as latency of his/her injuries, and evidence of the claimant's due diligence in attempting to establish the insurance status of the other vehicles involved in the accident (see Matter of Metropolitan Property & Cas. Ins. Co. v Mancuso, 93 NY2d at 492-493; Mighty Midgets v Centennial Ins. Co., 47 NY2d at 19-20; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d at 441; Matter of Blue Ridge Ins. Co. v Cook, 301 AD2d 598, 599; Matter of Allstate Ins. Co. [White], 231 AD2d 950; cf. Matter of Nationwide Mut. Ins. Co. v Wexler, 276 AD2d 490, 491).

Here, the respondent Charles McBride established a reasonable excuse for his nearly one-year delay in notifying his insurer, the petitioner, Progressive Northeastern Insurance Company (hereinafter Progressive). McBride submitted evidence that his counsel sent several written requests to the insurers of the vehicle which struck the taxicab in which he had been a passenger at the time of the accident, and to the insurers of the taxicab, and that in the ensuing 12 months those insurers ignored his requests and/or provided erroneous information on the SUM limits of their respective policies (see Mighty Midgets v Centennial Ins. Co., 47 NY2d at 20-21; Matter of Allstate Ins. Co. [White], 231 AD2d 950; cf. Matter of Travelers Ins. Co. v Cohen, 61 AD3d 768; Matter of Continental Ins. Co. v Marshall, 12 AD3d 508; Matter of State Farm Mut. Auto. Ins. Co. v Bennett, 289 AD2d 496; Matter of Interboro Mut. Indem. Ins. Co. v Sarno, 277 AD2d 454; Matter of American Cas. Ins. Co. v Silverman, 271 AD2d 528; Matter of Nationwide Ins. Co. v Montopoli, 262 AD2d 647). Accordingly, we affirm so much of the judgment as denied that branch of the petition which was to permanently stay the arbitration. 

Several written requests to insurers of vehicles involved for coverage limits information either ignored or incorrectly answered = reasonable excuse for delayed notice of SUM claim. 

Remember that under Chapter 388 of the Laws of 2008, Insurance Law § 3420(d) was amended to add this new subparagraph (1):

(d)(1)(A) This paragraph applies with respect to a liability policy that provides coverage with respect to a claim arising out of the death or bodily injury of any person, where the policy is: (i) subject to section three thousand four hundred twenty-five of this article, other than an excess liability or umbrella policy; or (ii) used to satisfy a financial responsibility requirement imposed by law or regulation.

(B) Upon an insurer's receipt of a written request by an injured person who has filed a claim or by another claimant, an insurer shall, within sixty days of receipt of the written request: (i) confirm to the injured person or other claimant in writing whether the insured had a liability insurance policy of the type specified in subparagraph (A) of this paragraph in effect with the insurer on the date of the alleged occurrence; and (ii) specify the liability insurance limits of the coverage provided under the policy.

(C) If the injured person or other claimant fails to provide sufficient identifying information to allow the insurer, in the exercise of reasonable diligence, to identify a liability insurance policy that may be relevant to the claim, the insurer shall within forty-five days of receipt of the written request, so advise the injured person or other claimant in writing and identify for the injured person or other claimant the additional information needed. Within forty-five days of receipt of the additional information, the insurer shall provide the information required under subparagraph (B) of this paragraph.

 If a liability insurer is not complying with this statutory mandate to provide coverage limits information in a timely fashion, a claimant ostensibly could complain to the New York State Insurance Department and obtain that information.  This new statutory requirement should make it easier for claimants to obtain the necessary insurance information and put their SUM insurers on notice of a SUM claim in a timely fashion.