The New York Court of Appeals today handed down two decisions on whether an insurer needs to demonstrate prejudice when denying coverage as to a late notice of supplementary underinsurance motorist ("SUM") claim -- Rekemeyer v. State Farm Mut. Auto. Ins. Co. -- and late notice of a lawsuit -- Argo Corp. v. Greater New York Mut. Ins. Co.
Although the Court in Argo upheld the no-prejudice rule as to a late notice of lawsuit where no notice of claim was timely filed, it held in Rekemeyer that an insurer was required to demonstrate prejudice in the SUM context when the insured gave timely notice of the accident and had sought a no-fault claim.
The Court's decision in Rekemeyer, indeed, further muddies the waters as to the no-prejudice rule within the context of SUM (more entailed discussion later). One things is for sure, the Argo decision stops all speculation about the Court's attitude toward the no-prejudice rule as to liability insurers and places the First Department's decision in Great Canal Realty Corp. v. Seneca Ins. Co., Inc. in question.
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