Furthermore, the plaintiffs contention that the defense of lack of coverage was invalid because the defendant failed to issue a timely disclaimer is without merit. Where an insurer is entitled to deny a claim based on an absence of coverage, its failure to timely disclaim coverage does not preclude it from denying liability on that ground ( see Insurance Law § 3420 [d]; Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188; State Farm Fire Cas. Co. v Horton, 37 AD3d 820). Moreover, Insurance Law § 3420 (d) does not apply to out-of-state accidents ( see Matter of Transportation Ins. Co. v Cafaro, 295 AD2d 618). Based on the foregoing, the defendant established its entitlement to judgment as a matter of law by demonstrating, prima facie, that the unsatisfied judgment was not entered against its insured and there was no coverage for the accident under its policy.
Here, Chartis is not estopped from disclaiming coverage because it reserved its right to do so in the November 7th Letter, and, thus, ACHS cannot demonstrate reliance (State Farm Fire & Cas. Co. v Morton, 37 AD3d 820, 820 [2d Dept 2007], citing General Acc. Ins. Co. v 35 Jackson Ave. Corp., 258 AD2d 616, 618 [2d Dept 1999]). While ACHS presents evidence that Chartis was monitoring the underlying action, this is not a basis for estoppel when there has been a reservation of rights (K. Bell & Assoc., Inc. v Lloyd's Underwriters, 1997 WL 96551, *6, 1997 US Dist LEXIS 2417, *18 [SD NY March 5, 1997, No. 92 Civ. 5249 (AJP/KTD)], citing Sulner v G.A. Ins. Co., 224 AD2d 205, 206 [1st Dept 1996]).