Cornhusker Casualty Insurance Co. v. Kachman (Wash. S. Ct., December 18, 2008).
In Washington, certified mail is not “mail,” at least not if you are an insurance company sending a notice of cancellation.
In this case, Rockeries, Inc., failed to pay its premiums on time on eleven occasions in four years, and Cornhusker Casualty sent a notice of cancellation each time. The letter in question was sent via certified mail on September 29, 2004, and stated that the policy would be cancelled if payment was not received by October 19, 2004.
On October 22, 2004, Leanne Samples was killed in an automobile accident caused by a Rockeries employee. Cornhusker received the overdue premium installment on October 28, 2004. It returned the payment to the insured and denied coverage for the accident. On November 1, 2004, the undelivered notice of cancellation was returned to Cornhusker.
RCW 48.18.290 establishes a presumption that a notice of cancellation “mailed” to the insured is received. In a declaratory judgment action by Cornhusker, the United States Court of Appeals for the Ninth Circuit certified the following question to the Washington Supreme Court:
Does sending notice of cancellation by certified mail satisfy the “mailed” requirement of RCW 48.18.290 (1997) and give sufficient notice of cancellation to comply with RCW 48.18.290, even if there is no proof that the cancellation letter was received by the insured?
The court responded in the negative. Cornhusker and amicus contended that certified mail is consistent with the statutory procedure for “mailing” a notice of cancellation and is authorized for providing notice in other contexts. The court observed that the statute does not specifically authorize certified mail and found “practical differences between regular mail and certified mail.” The court held that certified mail places a greater duty on the insured than imposed by statute in that it requires the insured to be at home to receive the letter or to pick it up at the post office.
In light of this decision, an insurer sending a notice of cancellation in Washington should use regular mail instead of, or in addition to, certified mail.