The recent decision made by the Michigan Court of Appeals in Bronson Health Care v. Esurance Property and Casualty Insurance Company has significant implications for both pending claims in Michigan and how insurance carrier underwriting departments should manage policy renewals. Central to the case was evidentiary support confirming an insured party’s electronic signature (e-signature).
This decision directly affects personal injury protection coverage policies that are reduced or limited, and the statutory prerequisites for such policies to be valid. Insurers should be particularly mindful of legal issues that may arise from e-signatures. They should also strive to streamline the e-signature process to ensure ample evidence substantiating that the insured party genuinely signed the documents and policy plans.
In the Bronson case, the claimant had selected a $250,000 limited PIP policy instead of an unlimited one. For such limited policy to be effective, the claimant was obligated under MCL 500.3107c(1) to select the reduced coverage option and electronically sign the form endorsing their acceptance of this reduced coverage. Esurance Property and Casualty Insurance Company, the insurer, argued that the electronic signature was valid under MCL 500.3107e(2)(c), as it was compliant with the Uniform Electronic Transactions Act (UETA).
However, it was the Court of Appeals’ judgement that an electronically typed name on a document does not itself corroborate that the individual electronically signed the document in accordance to UETA. Consequently, further discovery was necessary to settle this matter. Despite this, the court did note that if the claimant had made premium payments after the reduced coverage policy was issued, the insurer could establish a rebuttable assumption that the policy had a $250,000 coverage limit. To demonstrate this, Esurance would need to present the policy underwriter as a witness and provide additional evidence pertaining to the premium payments.
In light of this decision, insurance carriers and underwriting departments should consider implementing safeguards to prevent policy choices from being contested later. Given UETA’s requirement of an ‘intention to sign’, e-signatures can be enforceable and binding in court. However, to establish that the e-signature belongs to the insured, insurers should include underwriting representatives on their witness lists and hold onto evidence regarding any diminished premiums resulting from the chosen reduced policy coverage.
There is potential room for future disputes related to the interpretation of electronic signatures. In situations where a court requires further discovery to verify e-signatures, options such as an affidavit or deposition might support evidence of a reduced policy selection and confirmation of e-signature authenticity. Insurers may also want to include a notary option in their e-signing policy selections. This could provide an additional layer of security and proof in the future.
The Court of Appeals did not provide specifics regarding what constitutes practical evidence of the e-signature belonging to the insured. Therefore, what the court may regard as sufficient evidence remains uncertain. However, despite the court’s present lack of detailed legislation on evidence of e-signatures on no-fault insurance policy renewals, insurance companies are advised to consult with legal teams to establish procedures for verifying e-signatures and avoid potential legal implications.
The outcome of this case appears to indicate that courts may not enforce an e-signed form for reduced coverage, when contested, without further proof that the e-signature belongs to the insured. Expectation and speculation abound that there might be more discovery and related motion practice on the issue that must be conducted.
The case, Bronson Health Care Grp., Inc. v. Esurance Prop. & Cas. Ins., Mich. Ct. App., No. 363486, opinion issued on 9/28/23, is likely to draw the interest of legal professionals across the world.