Notice of An Underinsurance Claim In New York
In Underinsurance Claims the Courts Determine Whether Notice was Given as Soon as Practicable Based on Circumstances and Factors of Each Case:
In Matter of Metropolitan Prop. & Cas. Ins. Co. v. Mancuso (93 NY2d 487 ) Judge Rosenblatt spoke for a unanimous bench in determining that in one of the cases presented, where notice had to be given as soon as practicable, the insured made a no-fault claim immediately after the December 1994 accident and commenced a personal injury action against the tortfeasor in January 1996 that was settled during discovery in October 1996, at which time the plaintiff's attorney first learned what the tortfeasor's policy limits were and filed a claim for underinsurance the next day, the courts below held that the notice was not given as soon as practicable and the Court of Appeals said, "We cannot say they erred as a matter of law" (93 NY2d at 496).
It should be noted that it appears that little or no effort was made prior to October 1996 by the insured's attorney to ascertain the policy limits of the tortfeasor and 22 months from the date of the accident and 10 months from commencement of the action passed before notice of an underinsurance claim was made. (Matter of Nationwide Ins. Co. [DiGioacchino], 255 AD2d 784 [3d Dept 1998].)
At the Court of Appeals, Judge Rosenblatt made the following salient observations:
"Underinsurance coverage is designed to increase the level of protection afforded to policyholders injured by negligent drivers who lack adequate liability insurance.
Typically, an underinsurance claim arises when a tortfeasor has insurance that satisfies the minimum legal requirements but is insufficient to provide full compensation to the injured claimant ...
"As with other types of insurance, underinsurance coverage involves notice provisions that are conditions precedent to the carrier's liability" (93 NY2d at 492).
With respect to the "as soon as practicable" requirement, the Court said:
"By its very nature the standard contemplates elasticity and a case-by-case inquiry as to whether the timeliness of the notice was reasonable, taking all of the circumstances into account" (93 NY2d at 494).
The Court further noted:
"Indeed, underinsurance analyses are intensely fact specific and therefore particularly well suited for determinations of timeliness of notice on a case-by-case basis" (93 NY2d at 494-495).
The standard, therefore, fixed by the Court was as follows:
"In interpreting the phrase 'soon as practicable' in the underinsurance context we hold that the insured must give notice with reasonable promptness after the insured knew or should reasonably have known that the tortfeasor was underinsured.
We contemplate an objective standard as to what constitutes reasonable ascertainment.
"The test, however, does not lend itself to mathematic precision.
What may be swiftly ascertained in one case may prove difficult and protracted in another.
In some instances injuries may manifest themselves immediately; in others, there may be latency.
There are also variables in connection with the parties.
Sometimes they may be easily identified, located and counted; sometimes not.
An underinsurance claim will also turn on the respective levels of policy coverage and degrees of fault of the parties.
This assessment may be straightforward and predictable, or it may be elusive or even surprising.
Courts will determine whether notice was given as soon as practicable based on circumstances and factors they consider relevant to that determination" (93 NY2d at 495).