On June 8, 2003, 16-year-old Deanna Delaney sustained serious injuries while a passenger in a vehicle that was involved in a single vehicle accident in Tennessee. Her mother, Penny Mackey, was an insured under a policy issued by Nationwide that included SUM coverage of $25,000 per person, $50,000 per accident.

By letter dated July 1, 2003, Mackeys attorney notified Nationwide of a no-fault claim and a potential uninsured/ underinsured motorist claim as a result of the accident. Mackeys attorney sent another letter dated July 15, 2003 enclosing a police report of the accident and indicating no coverage existed from any other policy in the household or from the vehicle involved in the accident.

In January 2004, Mackeys attorney informed Nationwide that a SUM claim would be pursued. Nationwide responded by letter dated January 8, 2004 in which it sought additional information and enclosed a Proof of Claim form that it requested the insured complete and return to its office. Copies of Delaneys medical records were sent to Nationwide in February 2004.

On March 29, 2004, however, Nationwide disclaimed coverage because it had not yet received the completed Proof of Claim form. The form, which ostensibly had been misplaced, was sent to Nationwide on April 14, 2004, but petitioner stood by its disclaimer.

In June 2004, Mackey served a notice of arbitration regarding the SUM claim. Nationwide sought a permanent stay of the arbitration. Supreme Court denied the petition and this appeal ensued.

The Appellate Division affirmed. The Court of Appeals recently held that where an insured previously gives timely notice of the accident, the carrier must establish that it is prejudiced by a late notice of SUM claim before it may properly disclaim coverage. (Rekemeyer v. State Farm Mut. Auto Ins. Co., 4 NY3d 468 (2005).

The claimants attorney supplied prompt written notice of the accident, made a claim for no-fault benefits and indicated that SUM coverage was implicated. Written notice regarding a SUM claim was repeated at least twice over the ensuing six months. Respondents forwarded to petitioner the police accident report of the accident as well as the pertinent medical records. Petitioner does not deny receiving any of these various letters and documents from respondents. Petitioner failed to show any prejudice and, under the circumstances of this case, should not be permitted to disclaim SUM coverage.

As a result the UM arbitration goes forward.

In the Matter of the arbitration between NATIONWIDE MUTUAL INSURANCE COMPANY and Penny MACKEY, –– N.Y.S.2d ––, 2006 WL 59555 (3rd Dept 2006)