When coverage expires, no notice required: COA clarifies notice requirement under MCL 500.3020(1)(b) and affirms insurers’ entitlement to rescind for application misrepresentations

In Holman v Mossa-Basha, unpublished opinion per curiam of the Court of Appeals, issued 11-29-18 (Docket Nos. 338210 & 338232), the Michigan Court of Appeals affirmed the trial court’s decision that statutory notice of expiration of coverage under MCL 500.3020(1)(b) was not required.

Although unpublished and not binding authority, the decision confirms that notice under MCL 500.3020(1)(b) is only required when a policy will be canceled within the policy period. Based on the ruling, it appears this will also apply to binders or certificates of insurance as well. Nevertheless, once the coverage expires, notice is not required.

Additionally, Holman affirms an insurer’s right to rescind an insurance policy when there are material misrepresentations in the application process, especially when the misrepresentations relate to coverage guidelines.

 

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