North Carolina Supreme Court Rules on Validity of Homeowner’s Insurance Cancellation Before Fire Loss

The North Carolina Supreme Court recently ruled in favor of Nationwide General Insurance, determining that a mailed cancellation notice was sufficient to void a homeowner’s insurance policy before a fire destroyed the property. The court’s decision, delivered on August 23, 2024, by Justice Anita Earls, upheld a previous appellate court ruling that the insurer had complied with state law by sending the notice, even though the homeowners claimed they never received it.

The case, Ha vs. Nationwide, highlighted the legal debate over what constitutes proper notice of cancellation. The plaintiffs, Nung Ha and Nhiem Tran, argued that the notice was lost in the mail, but the court found that the plaintiffs had ample warning through other indicators, such as the hazards cited in previous inspections and the receipt of a refund check from Nationwide. The court emphasized that the essential issue was the fact of notice, not the manner in which it was given.

This decision provides guidance on how insurers can properly cancel policies, reinforcing that actual notice, even without certified mail, can be legally binding. The ruling also signals to policyholders the importance of addressing cited hazards to avoid policy cancellations.