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Lawyer’s Corner: Non-Renewal Notice in Johnson v Metropolitan P&C Ins Co

When collecting benefits after an auto accident, everything rides on whether the policy was in effect when the accident happened. But what happens if the insurance policy is in another person’s name? Is the owner of a vehicle entitled to a separate notice if an insurance company doesn’t renew a policy in a household member’s name?

On September 22, 2012, Taevin Johnson was in a serious auto accident in his Chevy Impala. He fell into a coma and was treated at McClaren Oakland Hospital. Up to a year later, he still had nerve damage requiring ongoing medical care. But when his mother, Eddie, filed a claim with her insurance company, which covered Taevin as her child, the claim was denied.

Back on August 5, 2012, the insurance company had issued a non-renewal notice because Mr. Johnson had accumulated six points in moving violations on his license. They sent that notice to Eddie at her last know address but for some reason, the non-renewal notice never arrived.

It wasn’t until she noticed that the insurance premiums weren’t being deducted from her pay check that Eddie had any notice that her policy may have been cancelled. Taevin never found out about it prior to the accident.

So they went to court, saying that since Taevin was a named insured and the title owner of the insured vehicle he was entitled to a separate non-renewal notice. Because MetLife didn’t send that notice, they argued it was required to pay for Taevin’s injuries.

The court disagreed. Despite the fact that Taevin was named as an insured in the contract, the court determined he was not a “named insured.” That designation carried special rights and privileges according to the terms of the MetLife insurance policy, including the right to receive non-renewal notices. If Taevin had wanted to receive those notices, he or Eddie would need to have requested that he be added as a “named insured” rather than a “child.”

The Michigan No-Fault Act didn’t save him, either. Because Taevin lived in the same household as Eddie, MetLife had no statutory obligation to send him separate notices.

The court also interpreted the MetLife contract to only require the sending of non-renewal notices, not the receipt of the notice. The policy held:

“Proof of mailing of any notice shall be sufficient proof of notice.”

So the fact that Eddie never received the notice doesn’t matter. MetLife had met its obligation by sending the notice to Eddie’s address.

Because of this mailing error, Taevin is facing hundreds of thousands of dollars in medical billing that may send him into bankruptcy. Auto Accident attorneys need to be prepared to fight allegations that policies have been non-renewed. If the insurance company prevails on that claim, it will leave clients without any recovery.

David Christensen is a auto accident attorney at Christensen Law in Southfield, Michigan. He has been representing car crash victims for over 20 years. If your clients are facing a difficult motor vehicle accident lawsuit, contact Christensen Law today for a referral.