In light of the strong policy favoring the determination of actions on their merits (Scott v. Allstate Ins. Co., 124 A.D.2d 481, 484), we find no abuse of discretion in vacatur of the within default judgment upon defendant-respondent's showing of an unintentional failure by defendant-respondent's insurer to defend the action, lack of prejudice to plaintiff, and the existence of a potentially meritorious defense (Massachusetts Bay Ins. Co. v Guardian Escrow Corp., 171 A.D.2d 615, 616). We agree with the IAS court that, as a condition to the vacatur of the default, plaintiff should be compensated for the inconvenience caused by defendant-respondent's insurer's egregious inefficiency (see, Aces Mech. Corp. v. Cohen Bros. Realty Constr. Corp., 99 A.D.2d 455). Moreover, under the circumstances of this case, we find that, in order to adequately compensate plaintiff, the amount should be raised to $3,000.
Concur — Ellerin, J.P., Kupferman, Asch and Kassal, JJ.