There is no denying that millennials are changing the way many industries do business, and the insurance industry is no exception. Unlike previous generations, millennials are less likely to obtain insurance coverage through an insurance agency, and more likely to apply for coverage online. While in many respects this is a positive change for both the consumer and the insurance industry (e.g., easier access for consumers, lower overhead costs for insurers), online applications present unique issues which may result in coverage questions that put insurers and policyholders at odds.
In Progressive Advanced Insurance Co. v. Corekin, No. DKC 16-1340, 2017 U.S. Dist. LEXIS 151269 (D. Md. Sept. 18, 2017), for example, a policyholder disputed whether his electronic waiver of the default underinsured motorist coverage limits was effective under Maryland law. As part of his online application, the policyholder completed a page entitled “Notice Concerning the Waiver of Increased Limits of Uninsured Motorists Coverage in Maryland”, which contained a reproduction of a Maryland Insurance Administration form that authorized individuals to waive the default amount of UIM coverage. On that page, the policyholder clicked a box stating he was “affirmatively waiv[ing] [the default uninsured motorist coverage] and instead elect[ing] to purchase lower uninsured motorists limits.” He then typed his name in the signature space of the page. The inception policy and each renewal consistently stated that the UIM coverage limit was $100,000 per person. Nonetheless, after the policyholder was involved in an automobile accident, he asserted that he was entitled to additional UIM coverage because his waiver of the default UIM limits was not effective. Pointing to a state law requiring consent to conduct a transaction electronically, the policyholder argued that he never consented to conduct business with the insurer electronically and could not effectively waive the default UIM coverage. The court disagreed, finding that the policyholder’s conduct (creating an online account, completing an online application, communicating with the insurer electronically, and paying premiums online, etc.) established an agreement to conduct transactions electronically. As such, the waiver of default UIM coverage was effective and the policyholder was not entitled to additional coverage.