Insurance Law: Duty To Give Notice And UM Coverage

What Is “UM” Coverage?

“UM” coverage is an optional coverage that an insured may purchase to cover the insured who is injured by the negligence of another person who has no liability coverage or insufficient liability coverage to compensate the insured for his or her injuries. Like any insurance policy, an automobile policy providing UM coverage will have its own provisions regarding notice of a claim to the insurer. Care must be taken in reading the policy to determine whether the General Conditions section of the policy contains a notice provision applicable to all coverages or whether the UM coverage section contains its own notice provision.

Manzi v. Cotton States Mut. Ins. Co.

Some general notice provisions that require notice to the insurer within a specified time period have been construed to begin to run following the date of the accident and not the date the insured learns that the tortfeasor may be uninsured or underinsured. In Manzi v. Cotton States Mut. Ins. Co., the insured was injured in an auto accident.  More than six months after the accident she learned that the tortfeasor who had injured her was underinsured, so she provided notice to her insurer that she would seek proceeds from her UM coverage.  The policy contained a general notice provision requiring that the insurer be “notified promptly, but in no event later than 60 days, of how when and where the accident or loss happened.” The policy did not specifically mention when the 60-day period began to run or what event triggered the notice requirement.  The Court of Appeals ruled that the provision was not ambiguously silent, as the surrounding policy language made it clear that the 60-day period began to run at the time of the accident.  The court concluded that the insured had breached the notice provision as a matter of law.  Because the provision further stated that it “shall be a condition precedent to the existence of any coverage,” the insured was unable to recover her UM benefits.  A different outcome results, and fact issues are raised with regard to timely notice, when the provision requires notice “as soon as practicable.”

In the event that the uninsured or underinsured driver is unknown, the insured “shall immediately” report the accident to law enforcement. The requirement is a condition precedent to recovery of UM benefits, and a delay of only “four or five days” following the accident bars UM coverage.