Insurance Proper Delivery of Policy Cancellation Notice Must Be Met for Cancellation to Occur By: Megan and Anna

Key Words Definitions Cancellation - the action of canceling something that has been arranged or planned. Mailing - the action or process of sending something by mail. Delivery - the action of delivering letters, packages, or ordered goods.

Summary A court held an insurance company did not have a certified letter to be delivered to an insurer, so the attempt to cancel an insurance policy was not effective. Cornhusker Casualty had automobile insurance to Rockeries, Inc. the policy was up every 4 years. Rockeries, Inc. usually had late payments and the insurance company would send out a letter confirming to cancel service if the payment was not received. The Rockeries never paid their premium on September 2 nd. On September 29 th Cornhuskers sent out a letter that they were canceling the policy on October 19 th if no payment was received. The Rockeries never received a letter stating that information. On October 25 th, a Rockeries employee was in an accident and killed another person.

Summary The Rockeries told Cornhuskers about the accident and also sent a check for the premium that was previously due. Cornhuskers sent a letter back with check telling the Rockeries that the policy had been canceled before the accident had occurred. The Rockeries sued, stating the insurance company did not cancel the policy before the accident. The Rockeries appealed in district court. The federal appeals court certified a question about Washington insurance law to the Washington supreme court about the proper cancellation for an insurance policy.

Decision The state insurance law requires two things in order to cancel an insurance policy. It requires… – A written notice of a cancellation, accompanied by the actual reason therefore, must actually delivered or mailed to the name insured – The mailing of any such notice shall be effected by depositing it in a sealed envelope, directed to the addressee at his or her last address as known to the insurer. The notice is effective when it is mailed. Cornhuskers did not receive a notice that it was mailed so therefore the policy was not cancelled. We agree with the courts decision because the Rockeries, Inc. never received notice and even though Cornhuskers sent something in the mail they had no clue that the Rockeries never received it.