The state supreme court recently issued a decision in a case stemming from a Michigan car accident victim’s insurance claim. The plaintiff’s insurance company issued the plaintiff and his wife a six-month no-fault insurance policy from September 26, 2017, through March 26, 2018. The policy provisions required the plaintiff to pay a monthly premium and allowed the insurance company to cancel the policy if they provided the plaintiff with ten days’ notice.
During the policy period, the insurance company mailed the plaintiff a bill and advised that the company would cancel the policy effective October 27, 2017, if the plaintiff did not pay the premium on time. The plaintiff failed to pay the premium, and the insurance company offered to reinstate the policy with a lapse in coverage. In November 2017, a driver struck the plaintiffs while they were walking across a street. The plaintiff and his wife suffered damages as a result of the accident. Two days after the incident, the plaintiff sent a premium payment to their insurance company, and the company reinstated their policy that day. However, the insurance company advised the plaintiff that there was a lapse in coverage and they would not cover the claim. The plaintiffs filed a lawsuit against their insurance company. In response, the insurance company contended that the policy was canceled and not in effect at the time of the incident.
The primary issue on appeal was what constitutes a valid cancellation notice under MCL 500.3020(1). Courts evaluating contract disputes typically focus on reviewing the “plain language” of the statute. Specifically, the outcome of this case hinges on the meaning of the phrase “notice of cancellation.” The objective of this statute is to ensure that those who are insured under a policy are allowed to satisfy the condition that prompted the cancellation. This allows the insured to revive their policy, obtain alternate coverage, or adjust their activities to reduce the risk of operating their vehicles without insurance.
In addressing the matter, the Court reviewed the statute, and Court concluded that a cancellation notice is only effective if its “peremptory, explicitly, and unconditional.” In the current case, the insurance company’s letter provided that the cancellation hinged on the plaintiff’s failure to pay his insurance premiums. Thus, the notice contained conditional language, thereby making it ineffective as a notice of cancellation. As this case exemplifies, insurance dispute cases often require the assistance of an experienced accident attorney.
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If you or someone you love has suffered serious injuries or died in a Michigan car accident, contact the Neumann Law Group for assistance. The dedicated attorneys at our practice are committed to seeking justice on behalf of Michigan injury victims and their families. We handle claims stemming from Michigan motor vehicle accidents, premises liability, product liability, and medical malpractice. We handle all aspects of a lawsuit, including settlement discussions with insurance companies and defendants, litigation, and appeals. Contact our office at 800-525-6386 to schedule a free and confidential initial consultation with a Michigan attorney on our team.