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Allstate Insurance Company v. State Farm Mutual Insurance Company No. 43, Sept. Term, 2000 - page 16 / 26





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recovery by the person injured from the insurer, even though co-operation might not have defeated the

plaintiff’sclaimfordamages.” Id. Weaddedthat,ifaninsured“refusestogivetheinformationwhichthe

insurerneedstomakethedefense,or absents himself so that his testimony cannot be obtained, recovery

on the policy should be denied, if the insurer acts with good faith and diligence.” Id. at 164-65, 78 A.2d

at 463 (citing Hynding v. Home Accident Ins. Co., 7 P.2d 999 (Cal. 1932)).

In Fid. & Cas. Co. v. McConnaughy, supra, 228 Md. 1, 179 A.2d 117, the issue was

whether the insurer could disclaim for non-cooperation based on the insured’s having given false

information — that there were two eyewitnesses who would testify that the insured was driving properly

and that the accident was the fault of the plaintiff —which led the insurer to reject a settlement offer from

the plaintiff. Although we cited Indemni y Ins. Co. in our opinion, we did not mention the distinction

drawn in that case between non-cooperation based on false statements and that based on failure to attend

trial or give evidence and looked only to the language involving discrepancies in statements. We noted the

Maryland cases holding that “where there has been a failure tonotify the insurer of an accident, or to

forward it suit papers, or a breach ofa policy provision not to assume liability, no prejudice in fact need

be shown before the insurer could disclaim liability” but stated, with respect to the cooperation clause, that

it is included in liability insurance policies “so that the insurance company will not be prejudiced in

investigation and defenseat trial” and that “[i]t should be construed and applied to effectuate its purpose.”

Id. at 13, 179 A.2d at 123.

In Watson v. U.S.F. & G. Co., 231 Md. 266, 189 A.2d 625 (1963), the insured failed to give

prompt notice of the accident. He notified the company when, about a month after the accident, he

received a letter from an attorney for the claimant. Although the insurer commenced an investigation

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