Renewal Notices Sent Electronically Are Legal, Approved by the State and Effective
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Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
1 whether the Plaintiffs’ consented to receive electronic notices and
2 whether the notice provided by ASI satisfied Washington law.
Consent to Receive Electronic Notice
The court found that the terms and conditions statement was clear in informing the Plaintiffs that they were consenting to receive insurance policy documents electronically.
Whether the Notice Satisfied Washington Law
Washington law requires insurers to renew any insurance policy unless they have communicated their willingness to renew in writing to the named insured at least twenty days prior to its expiration date and included a statement of the amount of the premium required to be paid by the insured to renew the policy. The USDC found that ASI’s renewal notice, which was emailed to the Plaintiffs on July 15, 2022, complied with these requirements because the notice came 61 days before the renewal deadline and stated the amount required to be paid to maintain the policy.
The USDC noted that although ASI’s system of attaching renewal notices in lengthy packets was not ideal, it did not violate the law. The court also noted that insureds in Washington have an affirmative duty to read their policy and be on notice of its terms and conditions.
The Renewal Premium Notice
A “Renewal Premium Notice” was contained in the packet attached to the email. In relevant part, the Notice stated: “To accept this renewal offer and maintain your coverage, please pay the minimum amount due shown below.” The Notice listed “total amount due” as $1,471.00 and listed September 14, 2020, as the “due date.”
Plaintiffs did not pay the renewal by September 14, 2022, and the policy lapsed.
Plaintiffs’ house was destroyed by a fire on August 11, 2023 almost a year after the due date with no attempt made by Mr. Hughes to pay the premium.
When Mr. Hughes called to report the claim on August 12, 2023, he was informed that the policy had lapsed. Plaintiffs alleged that they incurred $750,000 in damages for the loss.
DISCUSSION
The USDC noted that the Plaintiffs were actually aware that they were receiving renewal notices by email. Indeed, the terms and conditions statement uses the words “insurance policy documents” three times, making it clear that the “types of notices and documents” contemplated are those that pertain to the signor’s insurance policy.
Mr. Hughes confirmed receipt of the July 15, 2022, email containing the renewal packet. The “Renewal Premium Notice” in the packet instructed Plaintiffs to pay the minimum amount due to maintain their coverage and listed “total amount due” as $1,471.00. Since the notice came in 61 days before the renewal deadline and stated the amount required to be paid in order to maintain the policy it complied with Washington law.
Plaintiffs’ policy validly lapsed when they did not make the renewal payment.
ZALMA OPINION
Mr. Hughes agreed to accept all communications from ASI electronically and admitted that he received the communication stating when, and how much, he needed to pay to renew his policy. He did not pay the premium and the policy lapsed. ASI even wrote to Hughes about the lapse and he did nothing to renew the policy or find a new policy. I would feel for the man if he did not receive the notice but he admitted he received it and claimed that the premium requirement was hidden from his view even though it was made bold and in blue, ASI wrote to him to explain the lapse and so did his agent.. He had no one to blame for the loss except himself.
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Jury’s Findings Interpreting Insurance Contract Affirmed
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Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.
In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.
BACKGROUND
Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....
Failure to Name a Party as an Additional Insured Defeats Claim
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Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy
In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.
The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS
Parties Involved:
CAEA is insured by Associated Industries Insurance Company, Inc. ...
Exclusion Establishes that There is No Duty to Defend Off Site Injuries
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Attack by Vicious Dog Excluded
In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)
Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that
1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.
Presently before the Court are two ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
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Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
