Auto Owners can reject cottage claim because original named insured had died
Robert McGowan put his cottage into a trust in 2004. It was insured under a homeowners policy with Auto Owners. McGowan died in 2006 and his children took over the Trust management. There were two small claims under the policy, the billing address for the insureds was changed, and the bills were paid by a check issued under the name of the trust, but no one ever formally advised Auto-Owners that the Named Insured had died.
When Auto-Owners received the notice of a large claim, however, it took the position that since McGowan, the "named insured" who had received a "mature homeowner discount," had died, the policy was void and it did not owe on the claim. Even though it is likely that the current insureds had never seen the actual policy and that the nature of Auto-Owners' risk never changed, and even though the insureds believed they were insured and continued to pay premiums for several years without investigating other insurance, the Court held that Auto-Owners owed them nothing. The Court held that receiving checks from the trust at a new address did not put Auto-Owners on notice of a change in the insured's status.