October 22, 2014

 Chart Presents Show of Prejudice Requirements

 Summary: The notice–prejudice rule is a nationwide trend whereby an insurer must prove that it was prejudiced from the delay by the insured in notifying the insurer of an occurrence or of tendering suit papers.

This chart illustrates which states require insurers to show that they have been prejudiced by insureds filing late notices of claims before denying coverage.

The states' positions are not set and may be overturned by subsequent rulings. The chart is based on the most recent information available at the time of publication.

 

Jurisdiction

Insurer Need Not Show Prejudice

Insurer Must Show Prejudice

Authority

Alabama

x[1]

 

State Farm Fire & Cas. Co. v. Wiggins, 972 F.Supp. 570 (M.D. Ala. 1997).

 

 

 

 

Alaska

x

Weaver Bros., Inc. v. Chappel, 684 P.2d 123 (1984).

 

 

 

 

Arizona

 

x

Liberty Mutl. Fire Ins. v. Mandile, 963 P.2d 295 (1998).

 

 

 

 

Arkansas

x

 

Providence Washington Ins. Co. v. Yellow Cab Co. of Fayetteville , 331 F.Supp. 286 (W.D. Ark. 1971).

 

 

 

 

California

 

x

Root v. American Equity Specialty Ins. Co., 130 Cal. App. 4th 926 (Cal.App. 4 Dist., 2005).

 

 

 

 

Colorado

 

x

Clementi v. Nationwide Mut.Fire Ins. Co., 16 P.3d 223 ( Colo. 2001).

 

 

 

 

Connecticut

 

  x

Arrowood Indemnity Co. v. King, 304 Conn. 179 (2012).

 

 

 

 

 

 

 

 

Delaware

 

x

Falcon Steel Co. v. Maryland Cas. Co., 366 A.2d 512 (Del .Super. 1976).

 

 

 

 

District of Columbia

x

 

Greenway v. Selected Risks Ins. Co., 307 A.2d 753 (D.C.App. 1973).

 

 

 

 

Florida

 

x

Florida Physicians Ins Co. v. Stern, 563 So.2d 156 (Fla. App.4 Dist. 1990).

 

 

 

 

Georgia

x

 

State Farm Mut. Auto Ins. v. Sloan, 258 S.E.2d 146 (Ga. App. 1979).

 

 

 

 

Hawaii

 

x

Great Am. Ins. Co. v. Aetna Cas. and Sur. Co., 76 Hawaii 346 ( Hawaii , 1994) (dicta).

 

 

 

 

Idaho

 

x

Leach v. Farmer's Auto. Interinsurance Exchange, 213 P.2d 920 (Idaho 1950).

 

 

 

 

Illinois

x

 

Country Mutual Ins. Co. v. Livorsi Marine, Inc., 222 Ill.2d 303 ( Ill. 2006).

 

 

 

 

Indiana

x

Miller v. Dilts, 463 N.E.2d 257 (Ind. 1984).

 

 

 

 

Iowa

x[2]

 

Grinnell Mut. Reinsurance Co. v. Jungling, 654 N.W.2d 530 (Iowa 2002).

 

 

 

 

Kansas

 

x

National Union Fire Ins. Co. of Pittsburgh, Pennsylvania v. F.D.I.C., 957 P.2d 357 ( Kan. , 1998).

 

 

 

 

Kentucky

 

x

Jones v. Bituminous Cas. Corp., 821 S.W.2d 798 ( Ky. 1991).

 

 

 

 

Louisiana

 

x

Offshore Logistics Services, Inc. v. Mutual Marine Office, Inc., 520 F.Supp. 237 ( E.D. La. 1981).

 

 

 

 

Maine

 

x

Ouellette v. Maine Bonding & Cas. Co., 495 A.2d 1232 (Me., 1985).

 

 

 

 

Maryland

 

x

Prince George's County v. Local Gov't Ins. Trust, 879 A.2d 81 ( Md. 2005).

 

 

 

 

Massachusetts

 

x

Goodman v. American Cas. Co., 419 Mass. 138 (Mass. 1994).

 

 

 

 

Michigan

 

x

West Bay Exploration Co. v. AIG Specialty Agencies of Texas, Inc., 915 F.2d 1030 (6th Cir., 1990).

 

 

 

 

Minnesota

 

x

North Star Mut. Ins. Co. v. Midwest Family Mut. Ins. Co., 634 N.W.2d 216 ( Minn. App., 2001).

 

 

 

 

Mississippi

x

 

Reliance Ins. Co. v. County Line Place, Inc., 692 F.Supp. 694 (S.D.Miss., 1988).

 

 

 

 

Missouri

 

x

Southeast Bakery Feeds, Inc. v. Ranger Ins. Co., 974 S.W.2d 635 (1998).

 

 

 

 

Montana

 

x

J.G. Link & Co., v. Continental Casualty Co., 470 F.2d 1133 (9th Cir. 1971).

 

Nebraska

 

x

Herman Bros., Inc. v. Great West Cas. Co., 255 Neb. 88 ( Neb. , 1998).

 

 

 

 

Nevada

 

x

Las Vegas Metropolitan Police Dept. v. Coregis Ins. Co., 256 P.3d 958 (Nov. 2011).

 

 

 

 

New Hampshire

 

x[3]

Dover Mills Partnership v. Commercial Union Ins. Companies, 144 N.H. 336 (N.H., 1999).

 

 

 

 

New Jersey

 

x

Gazis v. Miller, 892 A.2d 1277 (N.J., 2006).

 

 

 

 

New Mexico

 

x

Foundation Reserve Ins. Co. v. Esquibel, 607 P.2d 1150 (N.M. 1980).

 

 

 

 

New York

 

x

McKinney's Insurance Law §3420[4]

 

 

 

 

North Carolina

 

x

Liberty Mutual Ins. Co. v. Pennington, 356 N.C. 571 (N.C. 2002).

 

 

 

 

North Dakota

 

x

Finstad v. Steiger Tractor, Inc.,, 301 N.W.2d 392 (N.D. 1981).

 

 

 

 

Ohio

x

 

Ferrando v. Auto-Owners Mut. Ins. Co., 98 Ohio St.3d 186 (Ohio, 2002).

 

 

 

 

Oklahoma

 

x

Fox v. Nat'l Sav. Ins. Co., 424 P.2d 19 (Okl. 1967).

 

 

 

 

Oregon

 

x

Halsey v. Fireman's Fund Ins. Co., 68 Or. App. 349 (Or. Ct. App. 1984).

 

 

 

 

Pennsylvania

 

x [5]

Brakeman v. Potomac Ins. Co., 371 A.2d 193 ( Pa. 1977).

 

 

 

 

Rhode Island

 

x[6]

Avco Corp. v. Aetna. Cas. & Sur. Co., 679 A.2d 323 (R.I., 1996).

 

 

 

 

South Carolina

 

x

Vt. Mut. Ins. Co. v. Singleton, 446 S.E.2d 417 (S.C. 1994).

 

 

 

 

South Dakota

 

x

Auto-Owners Ins. Co. v. Hansen Housing, Inc., 604 N.W.2d 504 (S.D., 2000).

 

 

 

 

Tennessee

x

 

Am. Justice Ins. Reciprocal v. Hutchison, 15 S.W.3d 811 (Tenn. 2000).

 

 

 

 

Texas

 

x

PAJ, Inc. v. Hanover Ins. Co., 243 S.W.3d 630 (Tex. 2008).

 

 

 

 

Utah

 

x

State Farm Mut. Auto. Ins. Co. v. Green, 89 P.3d 97 (Utah 2003).

 

 

 

 

Vermont

 

x

Coop. Fire Ins. Ass'n of Vermont v. White Caps, Inc., 694 A.2d 34 (1997).

 

 

 

 

Virginia

x

 

State Farm Mut. Auto Ins. Co. v. Porter, 272 S.E.2d 196 ( Va. 1980).

 

 

 

 

Washington

 

x

Thompson v. Grange Ins. Ass'n, 660 P.2d 307 (1983).

 

 

 

 

West Virginia

 

x

Colonial Ins. Co. v. Barrett, 208 W.Va. 706 ( W.Va. , 2000).

 

 

 

 

Wisconsin

x

 

Ranes v. Am. Family Mut. Ins. Co., 219 Wis.2d 49 ( Wis. , 1998).

Wyoming

 

 

Not Addressed

 

 

 

 

 

 

 

 

 

[1]

. Excess insurers must show prejudice. Midwest Employers Cas. Co. v. E. Ala. Health Care, 69[1]

[2]

. “Unless insured shows substantial compliance with a requirement on notice of a claim, excuse, waiver, or lack of prejudice to the insurer, prejudice must be presumed.” Grinnel Mut. Reinsurane Co. v. Jungling, 654 N.W.2d 530 (Iowa 2002). “Only when [insured] have satisfactorily shown excuse or legal justification, such as reasonable mistake or trivial occurrence, does the burden to show actual prejudice fall upon the defendant..” Henderson v. Hawkeye-Security Ins. Co,, 106 N.W.2d 86, 92 (Iowa 1960).

 

[3]

. Insurer need not show prejudice due to lack of notice under a claims made policy. Bianco Prof'l Ass'n v. Home Ins. Co.740 A.2d 1051 (N.H. 1999).

 

[4]

. The statutes states:

(2)(A) In any action in which an insurer alleges that it was prejudiced as a result of a failure to provide timely notice, the burden of proof shall be on: (i) the insurer to prove that it has been prejudiced, if the notice was provided within two years of the time required under the policy; or (ii) the insured, injured person or other claimant to prove that the insurer has not been prejudiced, if the notice was provided more than two years after the time required under the policy.

(B) Notwithstanding subparagraph (A) of this paragraph, an irrebuttable presumption of prejudice shall apply if, prior to notice, the insured's liability has been determined by a court of competent jurisdiction or by binding arbitration; or if the insured has resolved the claim or suit by settlement or other compromise.

(C) The insurer's rights shall not be deemed prejudiced unless the failure to timely provide notice materially impairs the ability of the insurer to investigate or defend the claim.” McKinney's Insurance Law §3420.

 

[5]

. Does not apply to claims-made policies.

 

[6]

. Insurer must show prejudice absent a “true consensual arrangement”, as seen in policies with experienced and sophisticated insureds. Textron, Inc. v. Liberty Mut. Ins. Co., 639 A.2d 1358 (R.I. 1994).