Uninsured Motorists Coverage, Notice, and Resident Relative
This case deals with the issue of uninsured motorists (UM) coverage, notice to the insurer, and whether the claimant is a resident relative of the named insured. This case is Waldron v. New York Central Mutual Fire Insurance Company, 922 N.Y.S.2d 609 (2011).
The insured and his daughter filed an action against the insurer seeking coverage under a $300,000 supplementary uninsured/underinsured motorists (SUM) provision of insurance for a claim arising out of a motor vehicle accident. The daughter was a college student in Florida when she was injured in a motorcycle accident. The father (named insured) had a policy with SUM coverage with New York Central Mutual Fire Insurance Company. About two months after the accident, the named insured (Waldron) advised his agent about the accident but said he did not want to file a claim with the insurer at that time. One year later, Waldron did file a claim and the insurer denied coverage. The insurer said that the claim was untimely and that the daughter was not an insured under the terms of the policy. Both sides then sought summary judgment.
The Supreme Court, Appellant Division, Third Department, noted that recent legislation in New York required an insurer to show prejudice if a claim is denied based on untimely notice. However, the court pointed out, even prior to the statutory amendment, when an insurer received notice of an accident in a timely fashion, the insurer could not properly disclaim a late SUM claim absent a showing of prejudice. In this instance, Waldron first communicated with his agent two months after the accident, and, effectively, this was notice to the insurer.
The insurer argued that the policy required notice of an accident as soon as reasonably practicable, but in no event more than 30 days after the accident, and the notice to the agent was past this timeline. However, the court said the 30 day timeline could be waived if there is proof providing justification for any delay. In this case, it was undisputed that Waldron's daughter had sustained very serious injuries and that he left New York immediately to be with his daughter in Florida . Even two months after the accident, there was a continuing concern that the daughter, who was still in the hospital, might lose a leg as a result of her injuries. This evidence was sufficient to the court to raise a factual issue as to whether the delay in notification was sufficiently justified under the circumstances. Moreover, the insurer did not submit proof addressing whether it was prejudiced by the delay, so the court resolved the question favorably to the insured.
As for the question of whether the daughter was an insured as a resident relative, the facts showed that although she rented an apartment off campus while attending college, she was a resident relative. She maintained a bedroom in her parents' house, she kept clothing there, she visited on weekends and lived at the house during semester breaks. In addition, the college considered her parents' address to be her permanent one and she retained her parents' address for voting and tax purposes.
Editor's Note: In this case, the Supreme Court, Appellate Division, New York ruled that a policy requirement that notice of an accident be given to the insurer as soon as reasonably practicable had to be weighed against the circumstances faced by the insured. The named insured's daughter was seriously injured in another state and he traveled there immediately; her condition was serious; and, the police report of the accident was not given to the insured until two months after the accident. Based on these facts and since the insurer did not show it was prejudiced by the slight delay in notice, the court found in favor of the insured.
The issue of whether a child is a resident relative while away at college often arises in coverage disputes. In this instance, the facts showed that the parents, the daughter, and her college all considered her to be a resident of the parents' household. The court agreed.