Key Takeaway
NY court rulings on no-fault insurance policy exhaustion defenses, including when insurers can claim coverage limits reached after denying claims improperly.
First Am. Alliance, Inc. v Ameriprise Ins. Co., 2018 NY Slip Op 51765(U)(App. Term 2d Dept. 2018)
“In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from an order of the Civil Court which denied defendant’s motion for summary judgment dismissing the complaint. In support of its motion, defendant alleged that, after it had denied the claims that are the subject of this action, it paid other claims and that those subsequent payments had exhausted the available coverage. However, even if true, this allegation does not warrant summary judgment dismissing the complaint on the basis of an exhaustion of available coverage defense “
The logic makes sense, but the result is plainly absurd. Poor claims handling should come with a price tag attached to it. Most of us would agree. But where we disagree is when the claims were properly handled and the policy exhausts. That is where the line in the sand needs to be drawn.
Ortho Passive Motion, Inc. v Allstate Ins. Co., 2018 NY Slip Op 51749(U)(App. Term 2d Dept. 2018)
“In support of its motion, defendant argued that there are no funds available to pay the judgment because the $50,000 policy limit in basic personal injury protection had been exhausted. Assuming, arguendo, that such contention, if established, would entitle defendant to some form of postjudgment relief (see Hospital for Joint Diseases v Hertz Corp., 22 AD3d 724 ), we find that, in any event, defendant’s motion papers failed to establish an exhaustion of the coverage limits of the insurance policy at issue, as defendant failed to demonstrate that the policy had been exhausted at the time the claims at issue had been deemed complete.”
