New York Insurance Coverage Law Update

September 1, 2012 | Insurance Coverage

Insurer’s Failure To Comply With Regulation Establishing Time Limits To Accept Or Reject Property Claims Does Not Preclude It From Relying Upon Exclusion To Disclaim Coverage

After a homeowner sued her insurer for compensation under her homeowner’s insurance policy for fire damage, the insurer raised affirmative defenses to coverage. The New York Court of Appeals affirmed the Appellate Division’s decision that an insurer’s failure to comply with an Insurance Department regulation that establishes times limits for insurers to accept or reject property claims did not preclude the insurer from relying upon a policy exclusion to disclaim coverage. [Mallory v. Allstate Ins. Co., 2012 N.Y. Slip Op. 06045 (N.Y. Aug. 28, 2012).]

Umbrella Policy That Expressly Negates Contribution Found Excess To Umbrella Policy That Does Not

An umbrella policy issued by Utica Mutual Insurance Company provided that it was “excess over, and shall not contribute with, any of the other insurance, whether primary, excess, contingent or on any other basis.”  Another umbrella policy provided that it was “excess over any insurance,” but without reference to contribution. The Second Department found that the Utica policy was excess to the other policy because it expressly negated contribution while the other policy did not. [Utica Mut. Ins. Co. v. Government Employees Ins. Co., 2012 N.Y. Slip Op. 05816 (App. Div. 2d Dep’t Aug. 1, 2012).]

Assignor’s Failure To Appear For IME Precludes Provider’s Recovery of First-Party No-Fault Benefits

A health care provider sued to recover assigned first-party no-fault benefits, and the insurer moved for summary judgment. The motion was denied, but was reversed on appeal. The appellate court found that the provider’s assignor had not appeared for a duly scheduled independent medical examination, thus failing to satisfy a condition precedent to coverage. [All Star Wellness Med., P.C. v. Praetorian Ins. Co., 2012 N.Y. Slip Op. 51630(U) (App. Term 2d Dep’t Aug. 7, 2012).]

Auto Policy Not Canceled Where Insurer Failed To File Notice Of Cancellation Within 30 Days

After a vehicle was involved in an accident, the insurer claimed that it had previously cancelled the owner’s policy. The court found the policy had not been properly cancelled because the insurer failed to file a notice of cancellation with the Commissioner of Motor Vehicles within 30 days. [Matter of Government Employees Ins. Co. v. Phillip, 2012 N.Y. Slip Op. 05966 (App. Div. 2d Dep’t Aug. 15, 2012).]

Court Finds Chiropractors Prohibited From Performing “Manipulation Under Anesthesia”

Chiropractors sued an insurer seeking to be compensated for rendering “manipulation under anesthesia” (MUA) services, which the insurer had refused to pay.  The court upheld the insurer’s decision, concluding that New York law does not permit chiropractors to perform MUA. [Willets Point Chiropractic P.C. v. Allstate Ins., 2012 N.Y. Slip Op. 51614(U) (N.Y. Civ. Ct. Richmond Co. Aug. 16, 2012).]

No Duty For Excess Insurer To Defend Where Underlying Policy Has Not Been Exhausted

After a subcontractor’s employee was allegedly injured in a construction accident and sued the general contractor, the subcontractor’s primary insurer defended the general contractor.  In turn, the general contractor filed a third-party action against the subcontractor for any amount the employee obtained in excess of the primary limits.  A federal district court held that the subcontractor’s excess insurer had no obligation to defend the subcontractor. The Second Circuit agreed, explaining that the language of the excess policy was “clear” that the underlying primary insurance must be exhausted before the excess policy would provide a defense. [Preferred Construction, Inc. v. Illinois National Ins. Co., No. 11-4339-cv (2d Cir. Aug. 30, 2012).]

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