Matter of Smith (Great American Ins. Co.), 60 N.Y.2d 203 (1983)
In uninsured motorist claims involving a hit-and-run vehicle, the requirement of physical contact between the insured’s vehicle and the unidentified vehicle is a condition of coverage, not an exclusion from coverage.
Summary
This case addresses whether the “physical contact” requirement in uninsured motorist endorsements for hit-and-run accidents is a matter of coverage or an exclusion from coverage. The respondents were involved in an accident with an unidentified vehicle but had no physical contact with it. The insurer sought to stay arbitration, arguing no coverage existed. The Court of Appeals held that physical contact is a condition of coverage. Since the insureds stipulated that there was no physical contact, no coverage existed, and the insurer was not required to disclaim coverage, and arbitration was properly stayed.
Facts
Marjorie Hobson and Vivian Belasco were in a car accident involving an unidentified driver who made an illegal turn in front of their car. To avoid a collision, the respondents swerved, losing control and colliding with another vehicle, which then struck another car. The unidentified vehicle sped away without making contact with the respondents’ vehicle. The respondents filed for arbitration under the uninsured motorist endorsement of Hobson’s insurance policy.
Procedural History
The insurer, Great American Insurance Company, initiated a special proceeding to stay arbitration, claiming no coverage due to the lack of physical contact. Special Term dismissed the petition and ordered arbitration, viewing the physical contact requirement as an exclusion. The Appellate Division reversed, holding that coverage did not exist without physical contact and that the insurer’s failure to disclaim coverage did not create coverage. The respondents appealed to the New York Court of Appeals.
Issue(s)
Whether the “physical contact” requirement in the definition of a “hit-and-run automobile” within a standard uninsured motorist endorsement is a matter of coverage or an exclusion from coverage.
Holding
No, because the definition of a “hit-and-run automobile” in the insurance policy requires physical contact; without it, no coverage exists under the policy’s terms.
Court’s Reasoning
The court reasoned that the requirement of physical contact is integral to the definition of a “hit-and-run automobile” as stated in the “Insuring Agreements” section of the insurance policy. This definition is derived from the Insurance Law, which mandates physical contact for certain protections to apply to an insured’s cause of action. The court emphasized that a “hit-and-run automobile by definition exists only when there is the specified physical contact.” Since the respondents stipulated to the absence of physical contact, there was no basis for coverage. The court distinguished between conditions that trigger coverage and exclusions that remove coverage that would otherwise exist. Because no coverage ever existed, the insurer was not required to disclaim coverage under Insurance Law § 3420(d). The court cited previous cases, including MVAIC v. Eisenberg, reinforcing the necessity of physical contact for uninsured motorist claims involving unidentified vehicles. The court concluded that the Appellate Division correctly stayed arbitration, even without a disclaimer from the insurer, as there was no initial coverage. The court affirmed the order of the Appellate Division.