Insureds Never Knew Their Policy Was Nonrenewed

A Connecticut Appeals Court has affirmed that an insurer is not obligated to provide actual notice of a home insurance nonrenewal; proof that the insurer sent the notice by registered or certified mail is sufficient.

The homeowners in the case claimed they never saw the certified letter about their policy’s nonrenewal that National General Insurance Co. mailed to them in 2020 weeks before their house was destroyed in an accidental fire. They also claimed they were never informed by the insurer or their agent of the results of a house inspection that formed the basis of the nonrenewal.

The homeowners did not learn they had no coverage until they called their agent on July 15, the day of the fire, and were told that their policy had not been renewed on June 27 because of an “unresolved inspection issue.”

The appeals court upheld a trial court’s granting summary judgments for the insurer and the insurance agency. The courts agreed that both the law and the insurance policy plainly provide that an insurer may send such a notice by registered or certified mail or may deliver the notice. Neither the law nor the policy requires “actual” notice or confirmation that the insured received the letter — the appeals court said that would render “meaningless the language affording the insurer the option to send the notice and specifying the manner in which it could be sent.”

The ruling also affirmed that in the absence of a special relationship, an agency’s duty to an insured ends after the policy is procured and an agent has no obligation to notify an insured about a nonrenewal or cancellation.

The agency also had no duty to inform them of the results of the house inspection that showed the house lacked some exterior siding, a condition the insurer considered a hazard that needed to be remedied.

The insureds further contended that the agency owed them a duty of care, even after the policy went into effect, because a special or fiduciary relationship existed between the parties. But the appeals court found no evidence of a relationship whereby the agency owed them an ongoing duty of care.