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Negligent Driver’s Late Notice Means Victim Cannot Recover Insurance Benefits

In personal injury cases, such as those arising from car or truck accidents, it may not be enough to prove the other driver was responsible. A victim may find it is impossible to recover damages even from an insured defendant if the insurer can prove the defendant did something which renders the policy inapplicable. In other words, a defendant’s own carelessness can leave a plaintiff with a worthless judgment.

Progressive Mountain Insurance Company v. Cason

Here is a recent example from a federal case involving a Georgia truck accident. The victim was driving his truck on Georgia Highway 232 when he was rear-ended by a second truck. As a result of the accident, the victim suffered a “severe concussion,” which caused him to miss several months of work. The victim claimed the second driver was at fault for the accident because he was speeding and did not look where he was going just before the collision occurred.

At the time of the accident, the second driver was driving his business partner’s truck. The partner also paid for the insurance on the vehicle. After the victim sued the second driver for negligence in federal court, the insurance company asked for a declaratory judgment holding it was not responsible for any judgment. (The second driver did not appear in court and therefore defaulted.)

The insurance policy contained language requiring the insured party to “promptly report each accident or loss even if an insured is not at fault.” Additionally, the insurance company must be informed “as soon as practicable” of any “accident, claim, or suit,” which may require coverage. In this case, the insurance company said it did not receive notice of the accident until 13 months after the accident, by which time the plaintiff had already filed his lawsuit. The insurer maintained this did not comply with the notice requirements of the policy, and therefore it was not required to defend or pay out any claim arising from the accident.

The courts agreed. In January, a federal judge in Augusta granted the insurance company’s request for a declaratory judgment against the accident victim. On September 15, the U.S. 11th Circuit Court of Appeals in Atlanta upheld the lower court’s decision. In an unsigned opinion, the appeals court said under Georgia law, “compliance with the ‘as soon as practicable’ language in a notice provision of an insurance policy is a condition precedent to coverage.” In other words, the victim cannot recover any damages through the insurer because the driver who caused the accident waited too long to report it.

Although the victim argued the language of the policy was ambiguous, the appeals court noted it was consistent with other Georgia cases. While an insured party has “some leeway in providing notice,” a delay of more than a few months may foreclose coverage altogether. In this case, the court said a 13-month delay was “unreasonable [] as a matter of law.” Moreover, it does not matter, at least under Georgia law, that the insurance company’s interests were not actually prejudiced by the delay.