Coverage, Staged Accidents & Choice of Law

The regulation names three: no coverage on the date of the accident, circumstances of the accident not covered by no-fault, and the statutory exclusions in Insurance Law § 5103(b) (11 NYCRR 65-3.8(e)). Related defenses: the collision was deliberate, not an accident (State Farm Mut. Auto. Ins. Co. v Laguerre, 305 AD2d 490 (2d Dept 2003)), or something other than the vehicle produced the injury (Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211 (1996)). Coverage denials are due within 10 business days after the determination, but a late notice does not preclude the defense (11 NYCRR 65-3.8(e); Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 (1997)).

If the vehicle that injured you was uninsured, first-party benefits come first from your household: a named insured or relative injured by an uninsured motor vehicle in New York claims against the insurer of the named insured or relative (11 NYCRR 65-3.12(a)(4); Insurance Law § 5103(a)(2)). If there is no such insurer and the accident occurred in New York, a qualified person applies to the Motor Vehicle Accident Indemnification Corporation (MVAIC), which pays first-party benefits for basic economic loss arising from an uninsured motor vehicle (Insurance Law § 5221(b)). MVAIC claims have their own sworn-notice conditions and time limits under Insurance Law § 5208, so act quickly.

Policy voidance means the policy never took effect because of a material misrepresentation in the application. A misrepresentation is a false statement of fact made to induce the contract; it defeats recovery only if material, meaning the insurer would have refused the contract had it known the facts (Insurance Law § 3105(a), (b)(1)). For a New York auto policy, the Second Department holds that Vehicle and Traffic Law § 313 bars retroactive cancellation for fraud: the policy stays in force for innocent third parties, though the insurer may raise the fraud against a participating insured (Insurance Co. of N. Am. v Kaplun, 274 AD2d 293 (2d Dept 2000)).

An operator or occupant of an insured motor vehicle, or any other person not occupying another motor vehicle or motorcycle, such as a pedestrian, claims against the insurer of that vehicle (11 NYCRR 65-3.12(a)(1)). A pedestrian struck by more than one insured vehicle may claim against any one of them (11 NYCRR 65-3.12(a)(2)). A named insured or relative injured by an uninsured vehicle claims on the household policy, and MVAIC pays when there is none (11 NYCRR 65-3.12(a)(4)). Where insurers dispute priority, the first insurer notified must pay and the insurers arbitrate among themselves (Insurance Law § 5106(d)(1); 11 NYCRR 65-3.12(b)(1)).

Supplementary uninsured/underinsured motorists (SUM) coverage is optional bodily injury coverage on your own auto policy that pays when the at-fault driver is uninsured or carries lower liability limits than yours, up to your SUM limit (Insurance Law § 3420(f)(2)(A)); its terms are the prescribed endorsement, 11 NYCRR 60-2.3. Payment requires exhaustion of the at-fault driver's bodily injury liability limits by judgment or settlement (11 NYCRR 60-2.3, Condition 8). Non-economic loss is payable only for a serious injury under Insurance Law § 5102 (Insurance Law § 3420(f)(1)). Disputes go to arbitration at the insured's option and written demand (Condition 11). Give written notice as soon as practicable (Condition 2).