Key Takeaway
NY court rules three errors in no-fault denial letters create fatal defects, demonstrating how precision matters in insurance claim responses.
When insurance companies deny no-fault claims in New York, they must follow strict procedural requirements. The denial must be timely, accurate, and contain specific information to preserve the insurer’s right to contest coverage. Even minor errors in denial letters can have major consequences, as demonstrated in a 2011 Second Department case that illustrates how multiple mistakes can compound into a complete waiver of defenses.
This case serves as a cautionary tale for insurers about the importance of accuracy in claim denials. Three seemingly small errors - incorrect bill amounts and wrong applicant identification - proved fatal to the insurance company’s defense. The court’s “three strikes” analysis shows how denial letters must be precise in every detail to maintain their validity.
Jason Tenenbaum’s Analysis:
St. Vincent’s Hosp. & Med. Ctr. v New Jersey Mfrs. Ins. Co., 2011 NY Slip Op 01828 (2d Dept. 2011)
“The plaintiff, St. Vincent’s Hospital & Medical Center, as assignee of Tula Huillca, demonstrated its prima facie entitlement to judgment as a matter of law. While the defendant insurer timely issued two denials of claim within 30 days of its receipt of the completed hospital facility forms (NYS Form N-F 5), those denials of claim, which incorrectly stated the amount of the bill (STRIKE ONE) and the amount in dispute (STRIKE TWO), and incorrectly listed Tula Huillca as the applicant for benefits (STRIKE THREE) instead of the plaintiff, were fatally defective (see St. Barnabas Hosp. v Allstate Ins. Co., 66 AD3d 996, 996-997; Nyack Hosp. v Metro. Prop. & Cas. Ins. Co., 16 AD3d at 565). In opposition, the defendant failed to raise a triable issue of fact.”
According to the Penal Law, three strikes will net you 25-life. Here, well, you succumb to whatever the Plaintiff felt like suing you for. The comments on this topic are worth a read. There are some interesting viewpoints on this issue, all of them quite intelligible.
Key Takeaway
This decision emphasizes that timely denial alone is insufficient - accuracy is equally critical. Insurance companies must ensure all details in denial letters are correct, as multiple errors can result in complete waiver of defenses. Unlike other denial scenarios where vagueness might be acceptable, factual inaccuracies create fatal defects that cannot be overcome.
