Opinion ID: 2228477
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Heading Rank: 4

Heading: The Nationwide Policy

Text: This policy required that the notice of claim for underinsurance benefits be filed as soon as practicable. That, we note, is the very language used by the New York Insurance Department in its standard form of endorsement (11 NYCRR 60-2.3) set forth in Regulation 35-D ( see, 11 NYCRR subpart 60-2 et seq. ). [2] Indeed, the phrase as soon as practicable has been commonly used in insurance policies and has a long history of judicial interpretation and application. By its very nature the standard contemplates elasticity and a case-by-case inquiry as to whether the timeliness of the notice was reasonable, taking all of the circumstances into account ( Deso v London & Lancashire Indem. Co., 3 NY2d 127, 129-130). In Mighty Midgets v Centennial Ins. Co. (47 NY2d 12, 19) this Court in defining the phrase as soon as practicable stated that [b]y no means does it connote an ironbound requirement that notice be `immediate' or even `prompt', relative as even those concepts often are; but that it calls for a determination based on the facts and circumstances particular to each case. One commentator explains that such clauses do not require instantaneous notice, but rather call for notice to be given with reasonable dispatch, in view of all the facts and circumstances of each particular case (8 Appleman, Insurance Law and Practice § 4734, at 35 [1981]). A good deal of the litigation surrounding the phrase as soon as practicable involves an inquiry into whether a liability policyholder notified the carrier of an occurrence that might give rise to a claim by a third person against the policyholder ( e.g., Security Mut. Ins. Co. v Acker-Fitzsimons Corp., 31 NY2d 436, supra; Matter of State Farm Mut. Auto. Ins. Co. v Adams, 259 AD2d 551; United Talmudical Academy v Cigna Prop. & Cas. Co., 253 AD2d 423). These cases are useful to the extent that they deal with the reasonableness of excuses in general. They are not directly controlling, however, because underinsurance has unique conditions and features for the ripening of claims that do not exist in primary insurance cases. Indeed, underinsurance analyses are intensely fact specific and therefore particularly well suited for determinations of timeliness of notice on a case-by-case basis ( see, e.g., Matan v Nationwide Mut. Ins. Co., 243 AD2d 978, supra [delay excused due to subsequent discovery of more serious injuries than originally known]; Matter of Travelers Ins. Co. [DeLosh], 249 AD2d 924 [same]; Matter of Nationwide Mut. Ins. Co. [Fennimore], 201 AD2d 979 [delay excused upon a showing of a reasonable excuse and due diligence in ascertaining the policy limits of the vehicles involved in the collision]; Matter of Allstate Ins. Co. v Sala, 226 AD2d 172, supra [delay excused due to time spent at trial to apportion culpability]). In interpreting the phrase as soon as practicable in the underinsurance context we hold that the insured must give notice with reasonable promptness after the insured knew or should reasonably have known [3] that the tortfeasor was underinsured. We contemplate an objective standard as to what constitutes reasonable ascertainment. The test, however, does not lend itself to mathematic precision. What may be swiftly ascertained in one case may prove difficult and protracted in another. In some instances injuries may manifest themselves immediately; in others, there may be latency. There are also variables in connection with the parties. Sometimes they may be easily identified, located and counted; sometimes not. An underinsurance claim will also turn on the respective levels of policy coverage and degrees of fault of the parties. This assessment may be straightforward and predictable, or it may be elusive or even surprising. Courts will determine whether notice was given as soon as practicable based on circumstances and factors they consider relevant to that determination. In this context we note that in determining the extent of the tortfeasor's coverage, the Legislature in 1997 specifically amended Insurance Law § 3420 to address this issue (L 1997, ch 547). Now, as amended, Insurance Law § 3420 (f) (2) (A) requires carriers to disclose insurance policy coverage limits within 45 days after a written request by any person seeking damages who is also covered by his or her own underinsurance insurance. In addition, the time for an insured to make a claim for underinsurance benefits is tolled during the period the insurer of any other owner or operator of another motor vehicle that may be liable for damages to the insured, fails to so disclose its coverage (Insurance Law § 3420 [f] [2] [A]). The availability of this remedy may be taken as a relevant factor in evaluating the timeliness of an insured's notice of claim. In the case before us, the accident occurred on December 21, 1994. After having proclaimed his injuries as serious DiGioacchino commenced his action on January 15, 1996. Approximately 10 months later, in connection with a settlement offer, he came to learn the limits of the tortfeasor's policy and at that point furnished notice to the carrier. The courts below concluded from these circumstances that the insured did not give notice of an underinsurance claim as soon as practicable. We cannot say they erred as a matter of law.