Nationwide Illegally Cancels Homeowner’s Policy

Posted on: June 26th, 2012       Attorney Thomas Newell

A September 2010 decision of the Pennsylvania Commonwealth Court found that Nationwide improperly cancelled an insured’s homeowners policy and, therefore, must pay a legitimate claim. An elderly woman incorrectly paid $1,029.00 instead of the correct $1,129.00 amount for the renewal premium. Several months later, the home was burglarized and sustained significant property damage.

When the Nationwide insured put in a claim, she was told her policy had been cancelled. Nationwide claimed that it had sent her 2 cancellation notice letters and she had failed to pay in full her policy premium. At a hearing, Nationwide’s representatives admitted that their letters were returned as “undeliverable” even though they were sent to her correct address. They also did not follow company protocol as they did not contact her Nationwide agent to inform him/her of the communication problem. The PA Commonwealth Court found that Nationwide had violated the Unfair Insurance Practices Act by wrongfully cancelling her homeowners policy. Nationwide Mutual Fire Insurance Company v. Insurance Dept., 4 A.3d 231 (Pa. Cmwlth. 2010)

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