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Georgia Court of Appeals Outlines What is Reasonable Notice by an Insured for UM Coverage

On September 28, 2010, Gloria Silva was a passenger in a car involved in a motor vehicle collision with James Glover. On March 27, 2015, Silva settled her personal injury claim with Glover for $36,950, the remaining amount of liability coverage available under Glover's Allstate policy. Following the settlement, Silva amended her complaint in a renewal suit to include a claim that the collision was covered by her uninsured motorist (“UM”) coverage provided by Liberty Mutual Fire Insurance Company (“Liberty Mutual”). Silva v. Liberty Mut. Fire Ins. Co., 2017 WL 5382538 (Ga. Ct. App. 2017). Silva had not previously notified Liberty Mutual of the collision or the lawsuit.

Liberty Mutual filed a motion for summary judgment, contending that Silva did not notify Liberty Mutual that an accident had occurred until over four years after the collision and did not notify Liberty Mutual of any lawsuits until eighteen months after she settled her claim with Glover. Therefore, Liberty Mutual argued that Silva failed to comply with the notice requirements contained in her policy and Liberty Mutual was entitled to deny UM coverage for the collision. Silva alleged that the notice requirements were unenforceable because they conflicted with OCGA § 33–7–11(d) and that the notice she provided to Liberty Mutual was timely under that statute. The trial court granted summary judgment in favor of Liberty Mutual, finding that the uncontroverted evidence showed that Silva had failed to notify Liberty Mutual promptly of the collision or of her personal injury suit; therefore, her UM coverage was forfeited as a matter of law. Silva appealed the trial court’s order.

A condition applicable for UM coverage under Silva’s policy was that: “a person seeking Uninsured Motorists Coverage must also: ... Promptly send us copies of the legal papers if a suit is brought.” Further, “no legal action may be brought against [Liberty Mutual] until there has been full compliance with all the terms of this policy.” Therefore, Silva had a duty under her policy to notify Liberty Mutual “promptly” of any accident or loss, and an unexcused significant delay would be unreasonable as a matter of law. The Court noted that Silva's only excuse for her delay was that her counsel was unaware that Silva would need to utilize her UM coverage was unreasonable.

Additionally, the Georgia Supreme Court has held that OCGA § 33–7–11(d), “simply provides notice of the pendency of a lawsuit” in which the carrier “ultimately may be held financially responsible.” Stout v. Cincinnati Ins. Co., 502 S.E.2d 226 (1998). In contrast, the purpose of a separate notice provision in an insurance policy requiring prompt notice of an accident or loss is to ensure that an insurer can conduct its own independent investigation. Therefore, contractual notice provisions in an insurance policy requiring notification of the UM carrier promptly after an accident or loss serve a different purpose than OCGA § 33–7–11(d) and do not conflict with its terms. The Court held that OCGA § 33–7–11(d) did not render Liberty Mutual’s policy unenforceable, and affirmed the trial court’s grant of summary judgment for Liberty Mutual.

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