34-day Delay in Dislcaiming Coverage Violates N.Y. Ins. Law 3420(d)
New York Insurance Law § 3420(d) requires that insurers provide written notice of coverage denials “as soon as reasonably possible” for accident claims involving bodily injury and death. Courts hold that failure to comply with the statute results in a waiver of policy defenses, and that policyholders need not demonstrate prejudice to invoke the statute’s protection. In measuring reasonableness, however, courts have declined to establish fixed periods of time, concluding that reasonableness is determined based upon attending circumstances. Naturally, the absence of bright-line tests has led to uncertainty and considerable litigation. New York’s high court has addressed the issue several times, concluding in Hartford v. County of Nassau, 46 NY2d 1028 (1979), that absent excuse or explanation, a 60-day delay was unreasonable as a matter of law, and in First Fin. Ins. Co. v. Jetco Constr. Corp., 1 NY3d 64 (2003), that a 48-day delay violated the statute. Courts have rarely found that delays of as few as 30 days violate the statute; however, New York’s Second Department recently held in Sirius America Ins. Co. v. Vigo Construction Corp. (NY App, 2nd Dept. Feb. 5, 2008), that a disclaimer issued just 34 days after the insurer knew or should have known of the basis for denying coverage was ineffective as a matter of law.
