Michigan Court of Appeals: ‘Impossible for Titan to comply’ with Titan policy ‘by mailing a cancellation notice for nonpayment’ before nonpayment occurs
Titan Insurance Company was in such a hurry to cancel Hallie Wilson’s auto No Fault insurance coverage that the auto insurer violated its own cancellation rules in the policy it sold to Ms. Wilson. But breaking the rules has consequences.
As a result, Titan is liable to pay Ms. Wilson’s No Fault insurance benefits – even though the auto insurer may not have otherwise been obligated to do so.
Ms. Wilson would no doubt call this a victory. Michigan No Fault insurance attorneys who are used to seeing overreaching insurance company claims denials would agree.
It’s worth noting that in a state like Michigan – which has no meaningful first-party insurance bad faith laws or punitive damages that attorneys like myself can bring when insurers unjustly refuse to pay auto accident victims’ No Fault (PIP) benefits – these type of claims handling tactics are sadly more common than they should be.
In fact, as an attorney who has been seeing this type of claims handling for more than 20 years, I have another name for the outcome of this case: “Sweet justice.”
In Wilson v. Titan Insurance Company, the Court of Appeals ruled Ms. Wilson “remained covered” by her Titan No Fault auto insurance policy when she was injured in a March 5, 2012 automobile accident, even though she hadn’t paid her premium – as required – on February 25, 2012.
The reason, the judges explained, was because Ms. Wilson was still within her Titan policy’s “10-day notice” period for “cancellation … for nonpayment of premium.”
The Court said the 10-day notice period began to run on February 27, when Titan sent out its “Confirmation of Cancellation” – which was two days after Ms. Wilson’s premium payment was due. The judges rejected Titan’s argument that the 10-day notice period began to run when it sent out its “Premium Payment Notice” (PPN) on February 7 – which was well before Ms. Wilson actually failed to make her payment.
Here’s what the Court of Appeals had to say about Titan’s “reasoning”:
Ms. Wilson “was not in default or breach of the policy with respect to premium payments at the time the PPN was sent. It was impossible for Titan to comply with the insurance policy’s 10-day notice provision by mailing a cancellation notice for nonpayment of a premium before the occurrence of that contingency or event. Instead, the [PPN] mailed to plaintiff merely concerned the future possibility of nonpayment. It was not until plaintiff actually missed the due date for making the premium payment that it became feasible for Titan to send a true notice of cancellation for ‘nonpayment of premium.’ Titan’s February 27, 2012 so-called ‘Confirmation of Cancellation’ actually served as the proper cancellation notice for purposes of the 10-day notice requirement contained in the insurance policy.”
Michigan’s insurance companies do not like to follow the No Fault law – or their own policies
Wilson is yet another example of a troublesome trend that insurance attorneys in Michigan see developing:
Titan and other insurance companies do not like to follow the rules. Or the No Fault laws.
Just recently, in my auto law blog post, “Titan dillydallies on paying No Fault assigned claim – faces penalty interest, attorney fee sanctions,” I talked about how Titan had ignored the No Fault Law’s 30-day time requirement for paying benefits.
Now, here I am writing about Titan Insurance again, refusing to follow its own rules.
The difference is, in the previous case, the auto insurer was violated Michigan’s No Fault auto insurance law. Here, Titan is violating its own rules – the rules that the auto insurer itself, created, inserted into its auto insurance policies and has forced its insureds to comply.
Inexcusable conduct … again.
If Titan isn’t careful, it will be landing on my annual list of the worst auto insurance companies in Michigan.