The Michigan Court of Appeals recently decided a case that will affect many pending claims and how underwriting departments handle policy renewals. The case of Bronson Health Care v Esurance Property and Casualty Insurance Company was decided on 28 September. The decision directly relates to reduced PIP policies and the statutory requirements for such a reduced policy to be effective.
In Bronson, the plaintiff selected a $250,000 limited PIP policy. In order for the limited policy to take effect, MCL 500.3107c(1) required the plaintiff to mark her selection of the reduced coverage and sign the form indicating her agreement to accept the reduced coverage. The form was signed electronically. Esurance Property and Casualty Insurance Company (“Esurance”), the carrier, argued that the electronic signature was permissible under MCL 500.3107e(2)(c) because it complied with the Uniform Electronic Transactions Act (UETA).
The plaintiff was later involved in an automobile accident and was treated with medical expenses in excess of the $250,000 policy limit. Esurance denied additional claims, including Bronson’s, on the basis that the policy was exhausted. Esurance filed a motion for summary disposition on this basis, which was granted. This appeal followed.
In reversing the grant of summary disposition and remanding the case for further proceedings, the Court of Appeal held that an electronically typed name on a document does not, by itself, establish that the person electronically signed the document in accordance with UETA. Therefore, additional discovery was required to determine this issue. However, the court found that because the plaintiff made a premium payment after the reduced coverage policy was issued, the carrier could establish a rebuttable presumption that the policy had the $250,000 coverage limit. In order to establish this rebuttable presumption, Esurance would have to put the underwriter on its witness list and provide additional evidence of the payments.
The Court’s decision is unclear as to the extent to which the claimant denied that she signed the limited policy and what the Court considered to be sufficient evidence to establish that the claimant did in fact sign the policy, as well as the level of evidence required to establish the rebuttable presumption. However, in light of this decision, underwriters should be made aware of the potential concerns with electronic signatures and put safeguards in place to ensure that policy decisions are not subsequently challenged.
This decision seems to indicate a trend that if an insured e-signs a form for reduced cover, the courts may not enforce the signed form in the event of a dispute without additional proof that the e-signature is in fact the insured’s signature. This could lead to additional discovery and motions being filed to confirm that the signature is that of the insured.
