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What Happens if You Wait Too Long to Inform Your Insurance Company About a Car Accident?

Following any kind of car accident, it is a good practice to notify your insurance company as soon as possible. Even if you do not think you will need to utilize your insurance coverage, many policies contain language requiring prompt notification. This means that if you fail to give notice–even if you did not initially believe it was necessary–your insurance company may later reject a claim for benefits under the policy.

Silva v. Liberty Mutual Fire Insurance Company

Georgia is an “at-fault” state when it comes to motor vehicle accident liability; that is to say, the negligent driver is responsible for any damages. However, your own insurance policy may still come into play if the negligent driver lacks sufficient insurance to pay for all of the damages, or in cases in which the driver is never identified, such as in a hit-and-run accident. By law, all Georgia insurance companies must offer uninsured motorist (UM) coverage to address such contingencies.

But UM coverage can still require prompt notification following an accident. Here is an illustration of that point from a recent Georgia Court of Appeals decision. In 2010, the plaintiff in this case was involved in a car accident caused by another negligent driver. As it turned out, there were multiple victims of this particular accident, all of whom sued the driver. Eventually the driver was forced to exhaust the limits of his insurance policy, leaving only about $37,000 for the plaintiff here.

Since this did not cover the full amount of the plaintiff’s damages, she filed a claim against her own UM insurance carrier. This claim did not occur until 2015, some four-and-a-half years after the accident occurred. The insurer refused to provide coverage, citing the plaintiff’s failure to comply with the notification requirements of the policy.

Specifically, the policy said the insurer had “no duty to provide coverage” unless the plaintiff “promptly” notified it of “how, when and where the accident or loss happened,” as well as “copies of the legal papers if a suit is brought.”

The plaintiff argued that both her and her attorney were “unaware” that they “might need to utilize UM coverage” until 2015, when they first learned that the negligent driver exhausted the limits of his own insurance policy. The plaintiff said she “promptly” notified her carrier after making that discovery. And at the very least, she said it should be up to a jury to decide whether she complied with the policy’s notice requirements.

The Court of Appeals disagreed. Affirming a trial judge’s earlier ruling, the appeals court said that when an insurance policy requires notification “promptly” or “as soon as reasonably possible,” a multi-year delay is inexcusable. In prior cases, the Court of Appeals rejected delays of two years following an accident. By that same reasoning, the plaintiff’s delay of more than four years was insufficient to comply with her policy. Nor could the plaintiff excuse her delay based on the late discovery of the negligent driver’s exhaustion of insurance.