Pursuant to Insurance Law 5106(a), interest accrues on overdue no-fault insurance claims at a rate of 2 percent per month. A claim is overdue when it is not paid within 30 days after a proper demand is made for payment. In LMK Psychological Services, P.C. v. State Farm Mut. Auto. Ins. Co.,1 the Court of Appeals noted that the accumulation of interest is tolled if the claimant does not request arbitration or institute a lawsuit within 30 days after the receipt of a denial of claim, regardless of timeliness of the denial at issue.
Since LMK, it has long been assumed that an insurer need only show the existence of a denial in order to be granted the tolling of interest. Indeed, in practice, quite often, an insurer would simply have to show that the suit at issue was brought more than 30 days after a denial of claim form was dated, and interest would be tolled until the date of the commencement of the action.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
