Wednesday, October 8, 2008

NY Insurance Law § 3420(d) Not Applicable to Title Insurance Disclaimers

TITLE INSURANCE – INSURANCE LAW § 3420(D) – TIMELY DISCLAIMER
Doyle v. Siddo
(2nd Dept., decided 9/30/2008)


The New York Insurance Law § 3420(d) that has been in place for years and will be in a single subsection through January 17, 2009, provides:
(d) If under a liability policy delivered or issued for delivery in this state, an insurer shall disclaim liability or deny coverage for death or bodily injury arising out of a motor vehicle accident or any other type of accident occurring within this state, it shall give written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant.
Does it apply to title insurance disclaimers? No, says the Second Department in this decision:
Tibert's contention that Chicago Title failed to promptly disclaim coverage, which is premised on case law discussing the prompt disclaimer requirement of Insurance Law § 3420(d), is without merit. The requirements of Insurance Law § 3420(d) are expressly limited to claims for bodily injury or death arising out of accidents (see e.g. Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185; American Ref-Fuel Co. v Employers Ins. Co. of Wausau, 265 AD2d 49) and have no application to other claims such as the title dispute in this case (see e.g. Merchants Mut. Ins. Co. v Allcity Ins. Co., 245 AD2d 590, 592; Interested Underwriters at Lloyd's v H.D.I. III Assoc., 213 AD2d 246, 247).
Liability policies for death or bodily injury claims arising from accidents in this state. Got it?

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