PA Supreme Court Unanimous in Affirming Insurer Met Standard of Prejudice
Won a unanimous victory in the Pennsylvania Supreme Court in a case involving the standard for prejudice that an insurer must meet to deny coverage based upon late notice of a "phantom vehicle" claim. The Supreme Court upheld the Superior Court's reversal of a trial court's finding that an insurer, our client, was not prejudiced by the insured's failure to report a phantom vehicle within the 30-day time limit set forth in the Motor Vehicle Financial Responsibility Law, 75 Pa.C.S.A. §1702. The Supreme Court held that it is reasonable to require an insured to alert the insurer within a month's time and, while an insurer would not be permitted to deny coverage absent prejudice caused by late notice, showing such prejudice does not require proof of what the insurer would have found had timely notice been provided. Finally, the Supreme Court explained that an insurer is always obligated to investigate a claim such as it can, but where the insured's delay results in an inability to thoroughly investigate and thereby uncover relevant facts, prejudice is established.