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6 Ways to Challenge An Insurer's Denial of Your (Late) Notice of Claim

01st September 2008
By Jonathan Cooper in Legal
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Copyright (c) 2008 Law Offices of Jonathan Cooper

In our prior article entitled "5 Rules to Succeed in Filing an Insurance Claim," we provided tips to avoid some of the insurance industry's favorite gambits for denying rightful claims, including the insurer's receiving late notice of the claim. But let's say you made a mistake, and failed to timely notify your insurer about the claim. Should you meekly accept defeat, and walk away with your tail held squarely between your legs? Assuming that the claim is of significant value, the answer to this question should be a resounding "NO -- NOT WITHOUT A FIGHT!"

Although you could theoretically appeal the insurer's denial of claim to your State's Insurance Department, I have found this step to be a waste of time, money and effort. Your resources will be far better spent in court. That being said, your likelihood of success in contesting the insurer's denial of coverage in court will be largely dependent on the particular facts of your case, and naturally, some of these defenses are more difficult to prove than others. To help you make a more intelligent assessment of your chances, following is a list of possible challenges to the denial:

1) No prejudice, no denial - At the end of July, New York State Governor David Paterson signed into law new legislation that will bar insurers from disclaiming coverage for late claims unless they can demonstrate they were "materially prejudiced" by the delay. (Until the new law takes effect in mid-January, 2009, the rule remains that an insurer may deny claims on the grounds of late notice regardless of whether or not the insurer suffered harm by the delay.)

2) Lack of Knowledge of Injury - One justification for providing late notice of the claim is that was no reasonable basis to conclude that anyone was injured in the accident. Bear in mind that this is not an easy burden of proof to satisfy, because the courts have held that in an accident where the property damage totaled just over $700, the insured was obligated to notify his insurer about the potential for a personal injury claim.

3) Lack of Knowledge of Accident - although somewhat self-evident, if you had no reason to know that an accident occurred, you are not obligated to report it to your insurance carrier. Stated differently, you can't report what you don't know.

4) "They Would Never Sue Me -- Would They?" - New York's highest court has held that where it does not appear that any permanent injury has been sustained, and the nature of the relationship between the injured party and the insured (such as a close familial relationship) was such that the insured had reasonably believed that they would have been apprised if the injured party had been contemplating a lawsuit, late notice of the claim may be excused.

5) Lack of Knowledge of Coverage - New York's courts have found justifiable an insured's late notice of claim where the delay was caused by the insurance broker's faulty advice that the policy had been cancelled. Similarly, the courts have deemed reasonable an insured's untimely notice where the insured belatedly discovered that the defects in the workmanship of its products were caused by industrial sabotage, and there was substantial confusion as to which insurance policy was implicated.

6) Incapacity of the Insured - Finally, although infancy or illness do not, standing alone, toll the time within which the insured must provide notice of the claim, the courts have excused the timely notice requirement where the insured, a person of "limited personal and vocational backgrounds," was misinformed by the agent of the insurer that coverage was provided under a policy issued by another company. Likewise, the courts exempted an insured from the timely notice requirement where her physical condition rendered her completely dependent on others, and she had relied upon what the driver, her nephew, told her about the accident.

In sum, your insurer's denial of coverage for your late notice of claim need not be the final word on the matter. Under the right conditions, you retain the power to contest the denial - and win.


Jonathan Cooper is an attorney in private practice in New York. He has represented small businesses and individuals with respect to insurance-related claims for over 10 years. To order a copy of his book "Why Most Accident Victims Do Not Recover the Full Value of their Claim," please contact his office at (516) 791-5700, or order the book through his website at or at
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