For Want of $78 a Wife’s Injuries Go Uncompensated

Barry Zalma
Jun 22, 2023

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Plaintiff Eric Levy sought a declaration that defendant New York Central Mutual Fire Insurance Company (New York Central) is obligated to provide plaintiff with coverage, defense, and indemnification for an August 29, 2021 car accident where he negligently injured his wife. New York Central moved for an order granting summary judgment dismissing plaintiff’s complaint and for a declaratory judgment declaring that it is not obligated to provide plaintiff with a defense or indemnification for the motor vehicle accident that is alleged to have occurred on August 29, 2021, as no Supplemental Spousal Liability coverage exists for this claim.

In Eric Levy v. New York Central Mutual Fire Insurance Company, Index No. 66227/2021, 2023 NY Slip Op 23183, the New York Court found in favor of the insurer.

FACTUAL AND RELEVANT PROCEDURAL BACKGROUND

On August 29, 2021, while driving his car, plaintiff accidentally struck his wife Lisa Grauer (Grauer), and Grauer allegedly suffered serious including a fracture. At the time of the accident, plaintiff had an active motor-vehicle insurance policy through New York Central with bodily-injury liability limits of $250,000.00 per person injured. Grauer filed a claim against plaintiff to New York Central, alleging that she was injured as a result of plaintiff’s negligence.

Plaintiff alleged that New York Central is liable for breach of contract in the amount of $250,000.00 for failing to provide plaintiff with coverage, a defense and indemnification. Plaintiff moved for summary judgment on his amended complaint and is requesting a declaratory judgment, as set forth in the first cause of action. Plaintiff submitted an affidavit, describing the events that transpired and alleges that he was not provided with proper notice of SSL coverage.

New York Central avered that no SLL coverage exists for plaintiff’s policy, that it did comply with all notification requirements, and that plaintiff declined to purchase SLL coverage. New York Central issued a revised renewal policy adding an additional vehicle and included an SSL endorsement. The additional premium for the SSL coverage was $78.00 and plaintiff declined to purchase it.

Supplemental spousal liability insurance provides bodily injury liability coverage under a motor vehicle insurance policy to cover the liability of an insured spouse because of the death of or injury to his or her spouse, even where the injured spouse must prove the culpable conduct of the insured spouse.

DISCUSSION

Insurance Law § 3420 (g) was amended by Chapter 584 of the Laws of 2002, to require insurance carriers to offer their insureds supplemental spousal liability (SSL) insurance for an additional premium. This SSL coverage provides drivers with the option to be insured in cases where their negligence causes death or injury to their spouse.

Both parties present the insurance policy in support of their summary judgment motions and do not dispute the contents. The Court found that New York Central has made prima facie showing it is not obligated to provide plaintiff with indemnification or a defense for the motor vehicle accident occurring on August 29, 2021, because no SSL liability existed for this claim. Since Plaintiff declined to purchase the SLL an insurer is not required to provide insurance coverage for injuries sustained by an insured’s spouse.

It was undisputed that plaintiff did receive notification of the availability of the supplementary spousal liability insurance, and he refused to pay the extra $78 premium.

Accordingly, it was ordered that plaintiff Eric Levy’s motion was denied it its entirety. New York Central Mutual Fire Insurance Company’s cross motion for an order granting summary judgment dismissing plaintiff’s complaint and for a declaratory judgment, is granted; and it was further ordered that defendant New York Central, because, as no Supplemental Spousal Liability coverage existed; and it was further ordered that the case was dismissed, and the Clerk was directed to enter judgment accordingly.

ZALMA OPINION

Insurers do not like, because of the potential for fraud, to insure against injury to a family member of the insured. New York passed a law requiring insurers to provide coverage for injury caused to a spouse as long as the insured pays an additional premium. Mr. Levy refused to pay the extra $78 and, by so doing, refused the coverage that only after the accident he wanted. No luck since he got the offer and the charge and refused it.

(c) 2023 Barry Zalma & ClaimSchool, Inc.

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Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected]

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