Insured Dies Before House Fire; No Insurance Coverage for Resident Relative

An insured, Della Shields, had homeowners’ insurance protecting her home against fire loss. Ms. Shields was the sole named insured. The homeowner’s policy automatically renewed annually. The Plaintiff, Yvonne Davis, was the daughter of Ms. Shields and was living with her mother in the insured home when it was completely destroyed by fire in March, 2019. However, when the at-issue insurance policy was automatically renewed covering 2018-2019, the Insured was dead.

When the Insurance Company determined that the named Insured had deceased prior to issuance of the at-issue policy, it denied the claim, rescinded coverage, and refunded the premiums paid for the 2018-2019 policy at issue. Plaintiff, Ms. Davis, sued. The Trial Court entered summary judgment in favor of the Insurance Company. The trial court determined that the policy issued to the Insured in 2018 was void because the insured was dead at the time of the insurance renewal. Therefore, there could not have been an offer and acceptance (i.e., a contract) when the 2018-2019 policy was issued.

On appeal, the Sixth Circuit Court of Appeals affirmed summary judgment in favor of the Insurance Company. Although the Plaintiff wanted reformation of the policy by substituting her for the deceased named Insured, this would have been inappropriate because a valid contract with Plaintiff did not exist, thus precluding the equitable remedy of reformation. The insurance policy issued for the period 2018-2019 was not a continuation of earlier policies issued by the same insured. Each renewal was a separate contract.

Click on the case name to read the court opinion:  Davis v Westfield Ins. Co, unpublished, 6th U.S. Circuit Court of Appeals.

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