Insurance Coverage: Appellate court affirms summary judgment for insurance company after finding that the insurance company complied with the statutory notice requirements

Plaintiffs appealed from the judgment of the trial court granting the motions for summary judgment filed by the defendant insurance company, Century-National. The plaintiffs owned a home and subsequently purchased a homeowners insurance policy. The policy was effective from June 27, 2019, until June 27, 2020, and provided coverage for, among other things, damage to the dwelling up to a limit of $361,442. An inspection of the plaintiffs’ home was conducted shortly thereafter and revealed that a portion of the exterior of the home was missing siding. On July 24, 2019, a home inspection assistant acting on behalf of Century-National sent an email to the office manager of the insurance agency, who was a co-defendant in this matter, concerning the results of the inspection. The email included the home inspection report, a description of the repairs, and further stated that the situation needed to be discussed with the insured as such repairs were required as a condition of continued coverage. Proof of repair was required no later than March 27, 2020. On March 27, 2020, the home inspection assistant sent a follow-up email to the insurance agency indicating that no response was received regarding the repairs and therefore the homeowner’s insurance policy was not set to be renewed unless proof of repairs was received by the policy expiration date. The plaintiffs contend that they never received any communications from the insurance agency regarding the inspection, the necessary repairs, or the risk of nonrenewal. On April 19, 2020, Century-National issued a notice of nonrenewal, sent by certified mail, to the plaintiffs and the insurance agency. The notice stated, in part, that in order to rescind the notice, Century-National must receive proof that repairs had been made and listed the nonrenewal date as June 27, 2020. The plaintiffs dispute receipt of the notice of nonrenewal.

A mail carrier with the United States Postal Service first attempted to deliver the notice on April 23, 2020, but indicated that although the notice was left, no authorized recipient was available. Two subsequent reminders were left at the plaintiffs’ address. The postal service declared the notice “unclaimed” on May 6, 2020, and returned the letter to Century-National. Plaintiffs then brought their first action against the defendants alleging that the Century-National breached the terms of the policy, violated the Connecticut Unfair Insurance Practices Act and the Connecticut Unfair Trade Practices Act, acted in bad faith, and breached the implied covenant of good fair and fair dealing. Plaintiffs also asserted a claim against the insurance agency for failure to notify the plaintiffs of the Century-National’s intention not to renew and a breach of fiduciary duty. The plaintiffs then filed a second action against the insurance agency for several other causes of action. All parties subsequently filed motions for summary judgment in both actions. The trial court issued a memorandum of decision granting the Century-National’s motion for summary judgment in the first action. Plaintiffs appealed this decision.

On appeal, the plaintiffs claimed that the trial court improperly concluded that Century-National was entitled to summary judgment because (1) Century-National failed to provide actual notice of its intention no to renew the policy pursuant to Connecticut General Statute § 38a-323, and (2) Century-National failed to provide actual notice of nonrenewal pursuant to the terms of the insurance policy. In regard to the first argument, the plaintiffs allege that subsection (c) of § 28a-323, which sets forth the remedies available for an insurer’s failure to provide the required notice, and the legislative history of the statute, demonstrate that “actual notice” is required. However, the court was not persuaded. Section 38a-323(a)(1) provides in relevant party that the owner of an insurance policy subject to the terms of that statutory provision is entitled to renewal of the policy unless the insurer “sends, by registered or certified mail … or delivers to the named insured, at the address shown in the policy … as least sixty days’ advance notice of its intention not to renew …” (Emphasis added.) The Appellate Court agrees that under the clear and unambiguous language of § 38a-323(a)(1), sending a notice of nonrenewal by certified mail satisfies the statutory requirement. The plaintiffs’ argument that “actual notice” is required, meaning both delivery and receipt, fails as § 38a-323(a)(1) provides the insurer two means of providing notice: either sending by registered mail or delivering to the named insured.

Under the second argument, the plaintiffs rely on the policy language providing that the insurance companies may elect not to renew the policy “by letting [them] know” of that decision in writing. The plaintiffs argue that the nonrenewal language of the policy was added as a special provision, modifying the standard policy, to be consistent with what the plaintiffs contend is required under § 38a-323 of “actual receipt by the insureds of the notice.” The Appellate Court disagrees. In construing the language of the policy, the Appellate Court finds it apparent that, like § 38a-323(a)(1), the policy provision governing nonrenewal does not require that the plaintiffs receive actual notice of nonrenewal. Rather, the policy provides only that if the insurer chooses not to renew the policy, it “may do so by letting you know in writing at least 60 days before the expiration date of the policy” and that such notice “may be delivered to you, or mailed to you at your mailing address … by registered mail, [or] certified mail…” Sending notice via certified mail, as Century-National did here, complies with the express terms of the policy. For these reasons, on the issue of notice, the Appellate Court concluded that the trial court properly rendered summary judgment in favor of the Century-National. Deer v. Nat’l Gen. Ins. Co., 225 Conn. App. 656, 317 A.3d 19 (2024)