Key Takeaway
Court affirms no coverage where auto leasing company's employee affidavit proved no policy existed for the vehicle on accident date, establishing prima facie defense.
Understanding No-Fault Coverage Denials: When Records Prove No Policy Existed
No-fault insurance claims can be denied for various reasons, but one of the most straightforward defenses occurs when an insurance company can definitively prove that no coverage existed for a particular vehicle on the date of an accident. This scenario recently played out in a case involving Citiwide Auto Leasing, where a simple but thorough record search became the foundation for a successful coverage defense.
Under New York No-Fault Insurance Law, insurance companies have the burden of proving their defenses when denying claims. However, when an insurer can demonstrate through proper documentation that no policy was ever in effect, courts will typically find this sufficient to establish a prima facie case for denial. This type of defense relies heavily on the quality and thoroughness of the insurance company’s record-keeping and the credibility of the employees who conduct policy searches.
Jason Tenenbaum’s Analysis:
Compas Med., P.C. v Citiwide Auto Leasing, 2016 NY Slip Op 51504(U)(App. Term 2d Dept. 2016)
“In support of its motion, defendant submitted an affidavit by its employee, who described the details of a record search which she had performed and stated that her search had revealed that there was no Citiwide Auto Leasing policy covering the vehicle in question on the date of the accident. We find that defendant’s affidavit was sufficient to demonstrate, prima facie, that plaintiff’s claim did not arise out of a covered incident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 ).”
This one is interesting because the affidavit of the employee revealed a lack of policy covering the denominated vehicle. There was no evidence to the contrary.
Key Takeaway
When an insurance company can provide a detailed employee affidavit documenting a thorough search that reveals no policy existed for a vehicle on the accident date, this creates a strong prima facie defense against no-fault claims. Similar to cases where Chubb defense substantiated and unrebutted on this record, the absence of contrary evidence strengthens the insurer’s position significantly.
