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Does Failure to Give Notice Mean "No Harm No Foul?" or "Out of Luck"

If you don't provide timely notice of a claim to your insurer, are you simply out of luck?  Or do you stand a chance of retaining coverage if you can show that the insurer was not prejudiced by your delay?   Marc Mayerson of Insurance Scrawl offers us this exhaustive post on the consequences of failing to give timely notice in several different jurisdictions.   As Mayerson describes, even in more recent cases, many courts strictly enforce notice provisions, with no "ifs, ands or buts:"

"Courts continue to struggle with claims where the policyholder may not have provided notice as soon as one might have liked, and the coverage litigation typically centers on whether the dispositive argument is "no harm, no foul" -- that is, policyholders will argue that coverage is not lost unless the insurer has been prejudiced in some fashion from the allegedly "late" notice. The Illinois Supreme Court and a Texas appellate court both have confronted this question recently, and these are largely consistent with recent holdings from New York's highest court finding that the notice provision must be enforced as written -- no ifs, ands or buts."

So what are policyholders to do?  For starters, they can follow Mayerson's advice and try not to get into the situation to begin with:

"Of course, policyholders should assiduously avoid giving insurers this opportunity to deny coverage for a covered claim (and given the scope of exclusions few enough claims are covered to begin with). The advice I always give policyholders is this: 'Notice is like voting in Chicago –- do it early and often.'"

Beyond that, policyholders giving notice late are at the mercy of their insurers and the courts.  And here, Mayerson wonders whether the strict enforcement policies -- kicking a fella when he's down, as Mayerson puts it -- is really consistent with what we generally consider proper.

Posted by Carolyn Elefant on May 31, 2006 at 05:34 PM | Permalink | Comments (0)


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