Nationwide Mutual Fire Insurance v. Insurance Department - Cmwlth. Court - September 10, 2010
http://www.pacourts.us/OpPosting/Cwealth/out/411CD10_9-10-10.pdf
The court held that the insurance company improperly cancelled the homeowner's insurance, because it did not give her the proper statutory notice. Several notices to the homeowner were returned as "undeliverable." The homeowner, an elderly woman, was going back and forth from her home to that of a relative, but the agency found that she " did not officially change her address; therefore, there was no need for her to notify Nationwide of a change of address." Moreover, the insurance company did not follow its own internal policy of contacting the local agent of record for further investigation.
The "Commissioner found that there was no evidence that Nationwide made any attempt to re-send the notice or otherwise notify the homeowner that her policy was being cancelled prior to submission of the claim in December 2008. As such, the insurer's contention that it is truly unfair to Nationwide to void the cancellation since it was the homeowner’s conduct that prevented her from receiving the cancellation notice is without merit."
The Unfair Insurance Practice Act, 40 P.S. §§1171.1-1171.15, prohibits persons engaged in the business of insurance from engaging in unfair or deceptive acts or practices. Yorktowne Mutual Insurance Company v. Insurance Department, 662 A.2d 1164 (Pa. Cmwlth. 1995), petition for allowance of appeal denied, 543 Pa. 721, 672 A.2d 313 (1996). The insurer has the burden of proving compliance with the statutory requirements for cancellation of a homeowners’ policy of insurance. State Farm Mutual Automobile Insurance Company v. Department of Insurance, 578 A.2d 999 (Pa. Cmwlth. 1990), petition for allowance of appeal denied, 527 Pa. 595, 588 A.2d 915 (1991).
Section 5(a)(9) of the Act provides, in pertinent part, as follows: No cancellation or refusal to renew by any person shall be effective unless a written notice of the cancellation or refusal to renew is received by the insured either a t the address shown on the policy or at a forwarding address. 40 P.S. §1171.5(a)(9). Accordingly, “[i]f written notice is not received by the insured, the cancellation is ineffective.” Donegal Mutual Insurance Company v. Department of Insurance, 719 A.2d 825, 827 (Pa. Cmwlth. 1998). Herein, it is undisputed that Miller did not receive written notice of the cancellation of her homeowner’s policy as it was returned as “undeliverable” to Nationwide.
The language of Section 5(a)(9) of the Act "is clear and unambiguous. The cancellation of a homeowner’s policy is ineffective if written notice is not received by the insured. . . . Accordingly, the Commissioner properly determined, based on credible evidence, that Nationwide failed to comply with Section 5(a)(9) of the Act and the cancellation of Miller’s homeowner’s policy was ineffective.
