Where bodily injury damages resulting from a motor vehicle accident exceed the available insurance policy limits of the driver responsible for the accident, underinsurance coverage may be available under an injured person’s own motor vehicle policy, that of a household member, or that of the vehicle the injured person was occupying at the time of the accident if no other policy applies.

Prompt Notification of Car Accident

Under the standard Massachusetts Motor Vehicle Insurance policy all claims, including underinsured motorist claims, an insured must “promptly notify the company of any accident or loss.”   However, recognizing that claimants for underinsurance benefits may not know the extent of their injuries until some time after an accident and that other factors may delay notifying an insurer of a claim, the Supreme Judicial Court has held that in order to deny coverage of an underinsurance claim based on late notice, “an insurer must show that the notice provision was breached and the breach resulted in prejudice to its position.” The court found that a delay in providing notice, even an extreme delay of more than five years, does not, without more, establish actual prejudice. So, what does constitute sufficient prejudice?

Auto Claim Denied Due to Late Notice

In one recent case, a judge determined that an insurer was entitled to deny coverage for underinsured motorist benefits due to late notice. In that case, the underinsured motorist claim arose out of a 2006 accident. In 2008 the injured person recovered the policy limits of the responsible driver’s insurance. Following the injured person’s unrelated death in 2009, her estate in 2011, more than five years after the accident, notified the second insurer of the intention to pursue an underinsured motorist claim under a household policy.

Auto Insurer’s Position Prejudiced

Under the circumstances presented in the case, the judge found that as a result of the late notice, the second insurer was unable to depose or examine under oath the injured person regarding the accident or her damages and could not obtain an independent medical examination to determine the scope and extent of her injuries. The judge concluded that through no fault of its own the insurer was denied “critical evidence” and the testimony of a “material witness” as a result of the late notice which resulted in actual harm to the insurer’s interests because it deprived the insurer of important investigative tools to which it was entitled under the terms of the policy. The judge noted that where the claim is for underinsured motorist coverage, a late notified insurer may well not be prejudiced because, by definition, there is another insurer involved whose investigation of the occurrence could fulfill the investigative needs of the underinsured motorist insurer. However, in the case before the court the liability insurer had not deposed the injured person or obtained a recorded statement, and had not sought an independent medical examination. Based on his findings, the judge found that there was no coverage under the policy and awarded summary judgment to the insurer.

Free Personal Injury Consultation

If you were injured in a car accident, contact Attorney Bob Allison now for a free consultation by calling 978-740-9433 or filling out our free consultation form. We look forward to talking to you about your Massachusetts personal injury claim.