Pennsylvania Supreme Court Revisits Notice Requirement in UM Cases

In an uninsured motorist benefits case that has gone all the way up the appellate ladder, back down again, and, now, all the way back up, the Pennsylvania Supreme Court in the matter of Vanderhoff v. Harleysville, No. 98 MAP 2012 (Pa. October 30, 2013)(Opinion by Eakin, J.), the court addressed the following issues:

(1) What constitutes "actual prejudice" to relieve and insurance company of its obligation to pay insurance benefits to an insured?

(2) Should "actual prejudice" involve proof by an insurance carrier that it suffered a real material impairment of its ability to investigation and defend an uninsured claim?

(3) What constitutes a reasonable basis for a trial court finding that prejudice exists in a late report of a phantom vehicle?

In its majority Opinion, the Court essentially held that all three issues are really part of the same test. 　

The Pennsylvania Supreme Court in Vanderhoff ruled that these types of matters "must be addressed on a case-by-case basis wherein the court balances the extent and success of the insurer's investigation with the insured's reasons for the delay.

The Court noted that the Legislature mandated a 30-day notice requirement for a reason. It is reasonable that insureds must alert the insurer of the subject accident within a month's time.

The Court went on to rule that while an insurer will not be permitted to deny coverage absent prejudice caused by an insured's delay in notice, showing such prejudice does not require proof of what the insurer would have found had timely notice been provided.

While the insurer is always obligated to investigate the case such as it can, where an insured's delay results in an inability to thoroughly investigate the claim and thereby uncover relevant facts, prejudice is established. Handling these cases in this manner promotes prompt notice and advances MVFRL goals while encouraging insurers to investigate phantom vehicle claims.

Accordingly, the Superior Court decision was affirmed.  Anyone wishing to review this Opinion may click this LINK.  Justice Baer's concurring opinion can be viewed HERE.

I send thanks Scott Cooper of the Harrisburg, PA law firm of Schmidt Kramer for bringing this case to my attention (along with his excellent synopsis of the case), and I send thanks to Attorney Paul Oven of the Moosic, PA law firm of Dougherty, Leventhal & Price for bringing this case to my attention.