Articles & Publications 10.06.23

Michigan Court of Appeals Decision Raises Questions on Electronic Signatures in Insurance Policies

The Michigan Court of Appeals recently decided a case that impacts many pending claims and will impact how the underwriting department is handling policy renewals. The case of Bronson Health Care v Esurance Property and Casualty Insurance Company was decided on September 28, 2023. The Decision directly relates to reduced PIP coverage policies and the statutory requirements for such a reduced policy to be effective.

In Bronson, the Claimant, selected a $250,000 limited PIP policy. In order to effectuate the limited policy, the Claimant was required under MCL 500.3107c(1) to mark her selection of the reduced coverage and sign the form indicating her agreement to accept reduced coverage. The form was electronically signed. Esurance Property and Casualty Insurance Company (“Esurance”), the carrier, argued that the electronic signature was permitted under MCL 500.3107e(2)(c) because it complied with the uniform electronic transactions act (UETA).

The Claimant was later involved in a motor vehicle accident and received treatment with medical expenses that exceeded the $250,000 policy limit. Esurance denied additional claims, including those from Bronson, based on the policy being exhausted. Esurance filed a summary disposition motion on that basis and the dismissal was granted. The appeal then followed.

In reversing the grant of summary disposition and remanding the case for further proceedings, the Court of Appeals found that an electronically typed name on a document does not by itself establish that the individual electronically signed the document in accordance with UETA. Therefore, additional discovery was needed to determine that issue. However, the Court did note that because the Claimant 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 make that rebuttable presumption Esurance would need to produce the underwriter on its witness list as well as additional evidence regarding the payments.

The Court’s decision is unclear as to the extent that the Claimant was contesting that she signed for the limited policy and what the Court believes would be sufficient evidence to establish that the Claimant actually signed for the policy as well as what level of proofs are needed to create the rebuttable presumption. However, given this decision, the underwriting department should be made aware of the potential concerns of electronic signatures and create safeguards to ensure policy choices are not contested later.

This Decision seems to indicate a trend that despite an insured e-signing forms for reduced coverage, when contested, Courts may not enforce the signed form without additional proof that the e-signature is, indeed, the insured’s signature. This could lead to additional discovery and motions that will need to be filed in order to confirm that the signature is that of the insured.