dissenting:
I disagree with the majority’s adoption of a rule which, in the absence of prejudice to the insurer, discharges the insurer from its contractual obligations to the insured and works a forfeiture of the insured’s contractual rights. I therefore respectfully dissent.
An automobile liability insurance policy no longer can be considered a private contract, the conditions of which are mutually negotiated between the insurer and the insured. There is a contractual inequality in the execution of automobile liability policies which a rule of strict contractual construction does not adequately address. Several courts have faced up to this reality. The *292Pennsylvania Supreme Court in Brakeman v. Potomac Insurance Company, 472 Pa. 66, 371 A.2d 193 (1977), put the matter this way:
“An insurance contract is not a negotiated agreement; rather its conditions are by and large dictated by the insurance company to the insured. The only aspect of the contract over which the insured can ‘bargain’ is the monetary amount of coverage. And, as we have recognized, notice of accident provisions, such as that with which we are concerned instantly, are uniformly found in liability insurance policies.... Indeed, a review of the cases indicates that often the policies express the condition in identical language. . . . Thus, an insured is not able to choose among a variety of insurance policies materially different with respect to notice requirements, and a proper analysis requires this reality be taken into account.” 371 A.2d at 196.
See also, e.g., State Farm Mutual Automobile Insurance Co. v. Johnson, 320 A.2d 345 (Del.Super.Ct.1974); Pickering v. American Employers Insurance Co., 109 R.I. 143, 282 A.2d 584 (1971); Note, The Materiality of Prejudice to the Insurer as a Result of the Insured’s Failure to Give Timely Notice, 74 Dick.L.Rev. 260 (1970).
Moreover, what is at stake here as a result of noncompliance with the notice requirement is really a forfeiture of the very asset which the insured purchased with a premium payment, i.e., a liability policy providing the insured a legal defense to claim an indemnification against a judgment. As the New Jersey Supreme Court observed in Cooper v. Government Employees Insurance Co., 51 N.J. 86, 94, 237 A.2d 870, 873-74 (1968):
“This is not to belittle the need for notice of an accident, but rather to put the subject in perspective. Thus viewed, it becomes unreasonable to read the provision unrealistically or to find that the carrier may forfeit the coverage, even though there is no likelihood that it was prejudiced by the breach. To do so would be unfair to insureds.” 1
The purpose of the notice provision, after all, is to prevent the insurer from being prejudiced in its investigation and defense of a claim. 8 J. Appleman, Insurance Law and Practice § 4731 (1980). In cases where the insured fails to provide the insurer with any notice whatever of the accident or claim, an appropriate rule of law calculated to accommodate the legitimate interests of both the insurer and the insured is that formulated by the Tenth Circuit Court of Appeals in Jennings v. Horace Mann Mutual Insurance Co., 549 F.2d 1364 (10th Cir.1977). Under the Jennings formulation, there is a presumption of prejudice to the insurer in such cases and the insured has the burden of going forward with some evidence to dispel the presumption; if such evidence is presented, “the presumption loses any probative force which it may have had and it is then up to the [insurer] to go forward with the evidence that actual prejudice existed.” 549 F.2d at 1368; see also, e.g., Hubner and Williams Construction Co. v. London Guarantee and Accident Co., 280 *293F.Supp. 288 (D.Colo.1967).2 Far from being unmanageable, the Jennings rule is uniquely suited to achieve a just resolution of competing claims. If indeed the insurer has not been prejudiced by the lack of notice, it is no worse off with respect to a pending claim than if it received notice as soon as practicable.
Judicial recognition of public interest considerations in the construction of automobile liability insurance policies is long overdue. The Colorado General Assembly in the Motor Vehicle Responsibility Act, section 42-7-102, C.R.S.1973, acknowledged the untold injury and financial loss visited upon traffic accident victims by uninsured motorists. Other courts, noting this social catastrophe, have viewed the automobile liability insurance contract as vested with a significant public interest that should not be ignored in the construction of its provisions. E.g., Simmons v. Iowa Mutual Casualty Company, 3 Ill.2d 318, 121 N.E.2d 509 (1954); Cooper v. Government Employees Insurance Company, supra; Brakeman v. Potomac Insurance Company, supra. A rule requiring prejudice to the insurer before discharging it of its contractual responsibilities under the policy recognizes automobile liability insurance for what it is, an instrument of social policy designed to afford financial protection to victims of negligence. Because the rule of prejudice was not applied in this case, I would reverse the judgment of the Court of Appeals and remand for a new trial.
I am authorized to say that Justice DU-BOFSKY and Justice LOHR join me in this dissent.
. The consequences of noncompliance with the notice requirements often are phrased in legalese which is beyond the comprehension of the average layperson. The policy in this case, exclusive of special endorsements, contains eleven pages divided into three sections entitled “Insuring Agreements”, “Exclusions” and “Conditions”. There are some twenty-five separate subsections listed in the “Conditions” section, some of which are applicable to certain types of coverage. The notice requirements appear in paragraphs 1 and 2 of the “Conditions” section and are applicable to the insured’s liability coverage. However, these paragraphs make no mention of the consequences of an insured’s failure to give notice. Rather, paragraph 12 of the “Conditions” section states that “[n]o action shall lie against the company, unless as a condition precedent thereto, there shall have been full compliance with all the terms of the policy....” Under such circumstances one might reasonably question whether the average layperson, lacking legal or business training, would come to the conclusion that the “no action against the company” provisions of paragraph 12 render the notice requirements of paragraphs 1 and 2 conditions precedent to the insurer’s contractual obligations to defend and indemnify, as outlined in the “Insuring Agreements” section of the policy.
. In cases where an insured has given notice but not as soon as practicable, there should be no presumption of prejudice and the insurer should be required to prove that it was prejudiced in its investigation and defense of the claim before it is discharged of its contractual responsibilities to the insured. See, e.g., Lindus v. Northern Insurance Co., 103 Ariz. 160, 438 P.2d 311 (1968); Cooper v. Government Employees Insurance Co., 51 N.J. 86, 237 A.2d 870 (1968); Lusch v. Aetna Casualty & Surety Co., 272 Or. 593, 538 P.2d 902 (1975); Oregon Automobile Insurance Co. v. Salzberg, 85 Wash.2d 372, 535 P.2d 816 (1975).