NYS Insurance 3420 is Limited
Insurers in New York must worry about Insurance Law sec. 3420(d) , a provision that requires denials "as soon as possible" for accidents involving bodily injury or death. But, a recent appellated decision found that the statute did not apply where the incident was not an "occurrence." State Farm Fire and Casualty Co. v. Whiting, 53 A.D.3d 1033 (4th Dep't 2008). The court held that the statute does not apply "[w]here, as here, 'the insurance policy does not contemplate coverage in the first instance, ... requiring payment of a claim upon failure to timely discalim would [impermissibly] create coverage whre it never existed." (bracketed word in court's text) This decision suggests a line of argument that insurers might regularly consider when facing charges of violating this statute.
The rule of thumb is that 3420 (d) is applicable when the denial is based on an exclusion and not applicable if coverage is not "given" in the insuring agreement.