I spent the past several weeks discussing the proof of loss requirements in New York. Hopefully, the posts provided insight. A somewhat related issue is notice of a loss, and the requirements under New York law. The second section of the statute I discussed over the last several weeks also addresses notice of loss under certain insurance policies in New York.

New York Code §3407(b) states:

If any contract of insurance issued or delivered in this state, covering loss of or damage to property by fire provides that the insured give immediate notice, in writing to the insurer, of any loss or damage, it shall be sufficient compliance if immediate written notice is given, by or on behalf of the insured, to any licensed agent of the insurer in this state, with particulars sufficient to identify the insured and the property insured under such contract and to notify the insurer of the time and place of such loss or damage.

The importance of notice in insurance claims is demonstrated in the discussion of Heydt Contracting Corp. v. American Home Assurance Company.1

The law is settled that an insurer is not obligated to pay for the loss of its insured in the absence of timely notice in accordance with the terms of the policy.

The case quotes New York’s highest Court:

Notice provisions in insurance policies afford the insurer an opportunity to protect itself … and the giving of the required notice is a condition to the insurer’s liability…. Absent a valid excuse, a failure to satisfy the notice requirement vitiates the policy.

A provision in the policy that notice be given “as soon as practicable” mandates that notice is given within a reasonable time under the circumstances. “[T]he phrase ‘as soon as practicable’ is an elastic one, not to be defined in a vacuum”, and “there is no inflexible test of reasonableness.”2 What is reasonable is ordinarily left for determination at trial, but when there is no excuse for delay and there are no other mitigating circumstances, the issue can sometimes be disposed of as a matter of law before trial.

Always assume it is better to be safe and provide notice of a loss as soon as possible, rather than risk losing benefits by giving an insurer a late notice defense. This is true even if the extent and severity of the loss is not known when you provide notice.

1 Heydt Contracting Corp. v. American Home Assurance Co., 536 N.Y.S.2d 770 (1st App. Div. 1989).
2 Mighty Midgets, Inc. v. Centennial Ins. Co., 416 N.Y.S.2d 559 (1979).