Key Takeaway
New York court ruling transforms intentional act from coverage issue to policy exclusion, creating new category of precludable coverage defenses in no-fault insurance law.
The landscape of New York no-fault insurance law continues to evolve through judicial interpretation, particularly regarding how coverage defenses must be raised and preserved. A significant development emerged from the Second Department’s ruling in Nyack Hospital v. Allstate Insurance Co., which fundamentally altered how intentional acts are categorized within the framework of New York No-Fault Insurance Law.
This decision represents a notable shift in how courts approach the distinction between coverage issues and policy exclusions. The ruling’s implications extend beyond the immediate case, potentially affecting how insurers must structure their denials and how practitioners approach similar coverage challenges in the future.
Jason Tenenbaum’s Analysis:
Nyack Hosp. v Allstate Ins. Co., 2011 NY Slip Op 04644 (2d Dept. 2011)
This Medicaid crisis has spurred judicial activism from the Appellate Division, Second Department. Now an intentional act, both a coverage issue and a policy exclusion has been deemed to be the latter, to the exclusion of the former.
I swear people who practice other areas of law or PIP outside New York must look at the decisions and either laugh or cry. It is decisions like this that undoubtedly created the Unitrin monster.
Anyway, I guess I have to create a new category for precludable coverage defenses.
Key Takeaway
This ruling reclassifies intentional acts from coverage issues to policy exclusions, making them subject to timely denial requirements. The decision reflects the Second Department’s evolving approach to no-fault insurance disputes and creates new procedural hurdles for insurers seeking to assert this defense after initial claim processing.
Legal Update (February 2026): Since this 2011 post, New York’s approach to no-fault coverage defenses and denial requirements has continued to evolve through subsequent appellate decisions and regulatory amendments. The classification of intentional acts and the procedural requirements for raising coverage defenses may have been further refined by courts or modified through Insurance Department regulations. Practitioners should verify current provisions regarding denial timeframes and the preservation of coverage defenses under contemporary no-fault law.
