General Accident Insurance Co. v. Scott

In General Accident Ins. Co. v. Scott, 107 Md. App. 603, 669 A.2d 773, cert. denied, 342 Md. 114, 342 Md. 115, 673 A.2d 707 (1996), the Court affirmed a circuit court's grant of summary judgment in favor of an injured insured whose uninsured motorist insurer denied coverage based on the insured's twenty-nine-month delay in providing notice of the accident. Without deciding whether the forerunner of 19-110 actually applied to uninsured motorist coverage, the Court concluded that "an insurer cannot avoid coverage under an uninsured motorist policy on the grounds of an unreasonably late notice, unless the insurer proves that it suffered 'actual prejudice.'" Id. at 615, 669 A.2d at 779 . In General Accident Insurance Co. v. Scott, the insurer sought to disclaim liability for failure to provide "reasonable notice" when the insured submitted her claim for underinsured motorist coverage approximately 29 months after she was injured in an accident. The insurer argued among other things that even if it "could not identify specific instances of prejudice" it was nonetheless prejudiced by the delay because it could not "carry out the functions that prompt notice enables it to fulfill, such as easily locating and interviewing witnesses . . . while the accident is fresh in their minds, and observing the physical condition of the scene before it changes." Id. at 614. In that case, the Court construed the statutory requirement of "actual prejudice" to mean "that an insurer may not disclaim coverage on the basis of prejudice that is only possible, theoretical, conjectural, or hypothetical." Id. at 615. Accordingly, the Court held that "conclusory allegations about difficulties and inconveniences that would result from any delay in notification," unsupported by specific instances of how the insurer's interests were harmed, were insufficient as a matter of law to survive a motion for summary judgment. Id. at 616 In doing so, the Court observed that, although the insurer was claiming that the delay hindered its investigation of the accident, it adduced no evidence that it ever attempted to investigate the accident. Thus, the insurer could not "assert prejudice with regard to its ability to conduct an investigation that it never even tried to conduct." Id. at 617.