New York Insurance Coverage Law

Northern County holds that late notification of coverage bars under property policy

In late 2016, the roofing contractor stepped over the roof of the insurer, resulting in roof damage and internal water damage. The insured did not file a claim with his property insurer until early 2018, more than a year later. The insurer, Acadia Insurance Company, retained the rights, conducted an investigation, and then waived liability on the basis of late notification under the policy, which requires immediate notification of loss. The United States District Court of the Northern District of New York ruled the insurer in a simplified manner, stating that late notification of the insurer precludes coverage of the insurance policy, regardless of whether the insurer was injured. The court found that the insurer did not waive its late notice because it retained the rights and then waived. Thus, “no reasonable jury could conclude” that the insurer “voluntarily and intentionally withdrew its argument of late notice.” The court also held that the insurer’s belief that the loss would not exceed the deductible was not a reasonable excuse because the policy required that “all losses should be reported as soon as possible when they form the basis of the claim” and regardless of of that, the notice was delayed because the insured waited ten months to report, even after he knew the deductible would be exhausted. [13 State St. LLC v. Acadia Ins. Co., 2022 U.S. Dist. LEXIS 83013 (N.D.N.Y. May 9, 2022).]

The Southern District did not find coverage under the homeowners’ policy because the premises were larger than “four-family dwellings.”

The policyholder, the owner of an apartment building in Brooklyn, sued insurer Nationwide after he refused to cover damages that the policyholder suffered as a result of the building fire. The policy applied to “living quarters”, which are defined as “living quarters for one, two, three or four families” at the “address indicated in the declarations”. However, the building had at least six apartments. The United States District Court of the Southern District of New York ruled the insurer in a simplified manner, citing the fact that housing for six families is not covered by the policy. The court rejected the policyholder’s argument that the language of the policy was ambiguous because it used the term “family housing” rather than “residential building.” The court also rejected the insurer’s argument that Nationwide should have inspected the property before the policy was issued. [Koczwara v. Nationwide Gen. Ins. Co., 2022 U.S. Dist. LEXIS 84485 (S.D.N.Y. May 10, 2022).]

The court issues instructions to the jury for the environmental trial

The New York Supreme Court of New York County issued a jury instruction in a two-decade trial on whether Century Indemnity should cover Brooklyn Union’s environmental rehabilitation costs under redundant policies issued by Century from 1941 to 1969. . Policies only covered costs when the Brooklyn Union proved that the damage to the environment was accidental and not expected or intended by the Brooklyn Union. As to the point for assessing whether the injury was accidental, the court decided to instruct the jury that the investigation included what the Brooklyn Union knew or did not know at the time of the acts that caused the harm, not what it knew or did not know at the start date of each policy. As for instructing jurors on whether Brooklyn Union proved that the damage was accidental (rather than expected or planned), the court rejected the insurer’s offer to include a sentence stating that “if the station operator knew of the significant likelihood of damage,” the jury could acknowledge that the damage was not accidental. [Century Indem. Co. v. Brooklyn Union Gas Co., 2022 N.Y. Misc. LEXIS 1971 (Sup. Ct. N.Y. Cnty May 11, 2022).]