Non-Renewal Of Policy

Here is a homeowners claim from the Northern District of Texas, Amarillo Division, that is interesting.  The case is styled, Valerie Smith v. State Farm Lloyds.

This is a summary judgment opinion wherein State Farm asserts that it is entitled to summary judgment because it notified Smith two months before a fire destroyed her home that her homeowners policy had not been renewed.

Smith asserts she never received notice that the policy had expired.

State Farm asserts their argument on two main stanchions: (1) the Nonrenewal letter; and (2) billing statements starting in February 2018 expressly stating the insurance coverage was not renewed and a their is no line item charging monthly premiums for coverage.  State Farm asserts that these documents prove Smith knew about and acquisced to nonrenewal of the coverage.

Smith had a previous roof claim that had been paid by State Farm and she was very slow in making the repairs and based on the roof condition, State Farm was refusing to renew her policy.

Smith asserts that State Farm offers no proof it ever mailed the letter and she offers deposition testimony from herself, a representative of her mortgagee bank, and her insurance agent that none of the three received the letter.  Plus, she argues that State Farm lacked authority to cancel coverage because the insurance policy doe not list slow rebuild after payment of a claim as a basis for nonrenewal.

In the opinion, the Court points out that State Farm has provided some evidence that it generated the Nonrenewal letter but nowhere in hundreds of pages of filings, exhibits, and appendices is there any any evidence the letter was mailed.

State Farm admits it “did not submit additional evidence of mailing the letter by affidavit, certified mail return receipt or other method.”  Because Texas law requires an insurer to mail a notice of nonrenewal before terminating an insurance policy, the absence of proof of mailing leaves open the material question of whether the policy was in fact nonrenewed.

As to the nonrenewal premium not being paid, the Court stated “It cannot now colorably argue that nonpayment of a bill never charged resulted in termination of that policy.  The result of this would be to render code notification requirements a dead letter.


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