An Insurer Mistakenly Providing Benefits Does not Bind Insurer After it Discovers Error
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Dymond Ottey sued Maya Assurance Company for a judgment declaring that the defendant is obligated to provide insurance coverage. Ottey appealed from an order of the Supreme Court, Queens County (Pam B. Jackman-Brown, J.), dated June 27, 2019. The order, insofar as appealed from, granted that branch of the defendant’s motion which was for summary judgment dismissing the complaint.
In Dymond Ottey v. Maya Assurance Company, 2022 NY Slip Op 03397, No. 2019-09825, Index No. 701656/16, Supreme Court of New York, Second Department (May 25, 2022) the appellate court affirmed the trial court’s decision.
FACTS
The plaintiff allegedly was injured on February 14, 2010, when a livery cab from which she was exiting suddenly sped away, causing her to fall to the ground. The livery cab was owned by nonparty ABC Global Limo Corp. (hereinafter ABC Global). The plaintiff commenced an action against ABC Global to recover damages for her personal injuries, and obtained a default judgment therein against ABC Global in the principal sum of $75,000.
The plaintiff also applied to the defendant insurer for no-fault benefits, alleging that it had insured the livery cab. Initially, the defendant paid certain benefits, but it subsequently determined that the livery cab was not covered by it and informed the plaintiff that the payments had been made in error.
The plaintiff then sued for a judgment declaring that the defendant is obligated to provide insurance coverage.
The defendant moved for summary judgment dismissing the complaint. In support of its motion, the defendant submitted evidence which demonstrated that it had insured the livery cab until August 14, 2009, when the insured, ABC Global, submitted a request to remove coverage from the livery cab and transfer coverage to a replacement vehicle. Upon presentation of certain forms by ABC Global, the defendant removed coverage from the livery cab and transferred coverage to the replacement vehicle.
In support of its motion, the defendant argued that, since the livery cab was not covered at the time of the subject accident, it had no obligation to provide coverage.
The plaintiff argued that the defendant should be estopped from disclaiming coverage because it had failed to timely deny coverage, it had begun the representation and assumed the defense of the policy by paying certain benefits, it had lulled the plaintiff into sleeping on her rights, and the plaintiff had been prejudiced thereby as she was now precluded from seeking alternative remedies, such as a claim with the Motor Vehicle Accident Indemnification Corporation (hereinafter the MVAIC).
The Supreme Court (trial court) granted that branch of the defendant’s motion which was for summary judgment dismissing the complaint. The court found that the defendant was not required to issue a disclaimer because the livery cab was not covered on the date of the accident. The court further found that the plaintiff was not prejudiced by the partial payment, since she had 180 days from the date that she received notice of the defendant’s denial to pursue a claim with the MVAIC.
DISCUSSION
The plaintiff argued that the defendant should be equitably estopped from denying coverage because it was complicit in ABC Global’s insurance fraud. She further contends that she was prejudiced by the defendant’s failure to issue a disclaimer and partial payment because the statutory maximum she could receive if she filed a claim with the MVAIC is $25,000, and, therefore, she could not recover the full $75,000 default judgment amount. These arguments are raised for the first time on appeal, and are not properly before the court.
Accordingly, the order is affirmed insofar as appealed from.
ZALMA OPINION
There is no way to force an insurer to provide benefits to an injured person when it had no insurance in effect at the time of the accident. The fact that the insurer provided some benefits until it determined the policy had been deleted before the accident, it promptly advised the plaintiff who then – rather than take advantage of the MVAIC sued and by so doing lost the opportunity to collect a part of the default judgment she obtained from the operator of the vehicle that caused her injury.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected].
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The Professional Claims Handler
Post 5218
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-8-barry-zalma-esq-cfe-zdwsc, see the full video at https://rumble.com/v70zl4s-the-zalma-philosophy-of-claims-handling-part-8.html and at https://youtu.be/MIYcF71ffRQ, and at https://zalma.com/blog plus more than 5200 posts.
Claims Commandment X – Thou Shall Not Pretend to be a Lawyer
Some experienced and professional claims people know the law in their area of expertise better than most lawyers.
Adjusters should be adjusters and leave lawyering to lawyers. Similarly, lawyers should be lawyers and never try to be adjusters.
Claims Commandment XI – Thou Shall Empathize With the Claimant
Everyone presenting a claim is unhappy, disturbed, shocked, injured and needs help.
Empathy is identification with and understanding of another’s situation, feelings, and motives. It is the ability to understand another person’s circumstances, point of view, thoughts, and feelings....
HOW TO CREATE AN EXCELLENCE IN CLAIMS HANDLING PROGRAM
See the full video at https://rumble.com/v70wb2i-the-zalma-philosophy-of-claims-handling-part-6.html and at https://youtu.be/tL5nDKPEs40 and at https://zalma.com/blog plus more than 5200 posts.
Post 5217
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
An Excellence in Claims Handling program begins with a statement in the insurer’s claims manual or statement of professionalism that it is dedicated to providing excellence in claims handling to every insured who presents a claim.
The excellence in claims handling program should include, at a minimum:
A series of lectures supported by text materials explaining:
A definition of insurance.
How to read and understand an insurance policy.
How to interview an insured, witness, or claimant.
How to assist an insured in the insured’s obligation to ...
The Professional Claims Handler
Post 5216
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-5-barry-zalma-esq-cfe-jde8c, see the full video at https://rumble.com/v70q4x8-the-zalma-philosophy-of-claims-handling-part-5.html and at https://youtu.be/6b9tZQsEkB4, and at https://zalma.com/blog plus more than 5200 posts.
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
Standards to be a Professional Claims Adjuster
The Insurance claims professional should be a person who:
1. Can read and understand the insurance policies issued by the insurer.
2. Understands the promises made by the policy.
3. Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
4. Are competent investigators.
5. Have empathy and recognize the difference between empathy and sympathy.
6. ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
