Nationwide Property and Casualty Insurance Co. v. Greater New York Mutual Insurance Co.
A policyholder that informs the insurance company's agent it does not intend to renew the policy communicates a rejection of the offer to renew that terminates the policyholder's power to subsequently accept the offer to renew. Greater New York Mutual Insurance Co. requested a declaratory judgment that Nationwide Property and Casualty Insurance Co. is responsible for the damages that resulted because a fire took place at Coachlight Square on the afternoon of May 1, 2006. The court found that the Nationwide insurance policy expired at 12:01 a.m. on May 1, 2006. Coachlight Square elected to obtain coverage with Greater New York Mutual Insurance Co., because it offered coverage that was about $10,000 less expensive than Nationwide's policy. After the fire, Coachlight Square decided it could benefit from two insurance policies and attempted to renew the Nationwide policy. Nationwide received a check to renew the policy on May 9, and it returned the money to Coachlight Square. Greater New York Mutual Insurance Co. argued that Coachlight Square properly accepted Nationwide's offer to renew the policy. The court found that Nationwide's offer to renew the insurance contract could be accepted by paying Nationwide, on or before May 9. Prior to May 9, Coachlight Square manifested an intent to reject Nationwide's offer to renew insurance coverage, because it informed Nationwide's agent on May 2 that it had elected to obtain coverage with Greater New York Mutual Insurance, to save $10,000. A rejection of an offer can terminate the policyholder's power to accept. Even if Coachlight Square had not rejected the offer to renew on May 2, the "known loss" doctrine provides that one cannot insure against the loss of a building, after the building has burned. The Nationwide policy was not in effect after 12:01 a.m. on May 1, and the court granted judgment to Nationwide, with costs.