Insurance E-Signatures Will Require More Care After Michigan Case

The Michigan Court of Appeals’ recent decision in Bronson Health Care v. Esurance Property and Casualty Insurance Company will impact many pending claims in Michigan and how insurance carrier underwriting departments should handle policy renewals. The case addressed evidence confirming an insured party’s e-signature.

The decision directly relates to reduced or limited personal injury protection coverage policies and statutory requirements for such policies to be effective. Insurance companies must be aware of the potential legal issues arising from e-signatures. Additionally, insurance companies should refine the e-signature process to establish sufficient evidence that the insured party legitimately signed the documents and policy plans.

In Bronson, the claimant selected a $250,000 limited PIP policy instead of an unlimited policy. 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, the carrier, argued the electronic signature was permitted under MCL 500.3107e(2)(c) because it complied with the Uniform Electronic Transactions Act.

The claimant was later involved in a motor vehicle accident, received treatment, and incurred medical expenses exceeding 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.

The Court of Appeals found that an electronically typed name on a document doesn’t 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. To do so, Esurance would need to produce the underwriter on its witness list and additional evidence regarding the payments.

Given this decision, insurance carriers and underwriting departments should create safeguards to ensure policy choices aren’t contested later. Because UETA requires an intent to sign, among other requirements, e-signatures are enforceable and binding in court. However, to establish that the e-signature is that of the insured, insurance carriers should include underwriting representatives on their witness lists and retain evidence regarding any reduced premium resulting from the reduced policy coverage choice.

Where a court determines that further discovery is needed to confirm e-signatures, an affidavit or deposition may assist as evidence of a reduced policy selection and confirmation of e-signature authenticity. Insurance carriers may also consider adding a notary option to their e-signing policy selections.

The Court of Appeals didn’t specify what constitutes evidence of the e-signature being that of the insured, so it isn’t yet clear what a court may deem as sufficient evidence. Despite the court’s lack of specific legislation on the evidence of e-signatures on no-fault insurance policy renewals, insurance companies should consult with a legal team to assess potential processes to confirm e-signatures and avoid negative legal repercussions.

The Michigan Court of Appeals’ decision seems to indicate a trend that courts may not enforce an e-signed form for reduced coverage, when contested, without additional proof that the e-signature is the insured’s signature. Given the decision and the questions regarding what may be required to enforce the signed agreement, there likely will be more discovery on the issue that must be conducted—and additional motion practice to establish the same.

The case is Bronson Health Care Grp., Inc. v. Esurance Prop. & Cas. Ins., Mich. Ct. App., No. 363486, opinion 9/28/23.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Leah M. Yair is a senior associate at Segal McCambridge.

David J. Yates is a shareholder at Segal McCambridge.

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