The Paperless Revolution

Many businesses and consumers are in the midst of the paperless revolution, and I'm definitely drinking the Kool-Aid.

I hate mail. I opt into every electronic delivery notification service I can—bills, accounting statements, military documents, legal bar association notices, everything. The first thing I do when a lawsuit starts is ask opposing attorneys whether they'll agree to exchange all documents by email. In the perfect world, I would never receive a single piece of mail ever again. 

There's a cost, of course, with the E-Revolution. Overkill. To say the average American is flooded with email would be a huge understatement. Approximately 124.5 billion emails are sent every day—that's right, billion. The average person receives 90 business emails each day and sends out 45 emails—not to mention personal and junk emails that devour your inbox like a monsoon.

That's why it's so easy to open an email with a large attachment, and think: “I'll read that later.” Especially your auto and home insurance documents, which seem like they never end.

Don't be like David Jackson

I'm guessing that many people haven't read their entire auto insurance policy word-for-word (neither have I). But a recent Court of Appeals case should make you think twice the next time your renewal notice comes around. 

The case is Jackson v. Esurance Insurance Company. Here's the basic story: In February 2006, David Jackson purchased an auto insurance policy from Esurance, an Internet-based insurance company that offers paperless notifications. To opt in, a policyholder agrees to receive all insurance-related documents via email. There is also an online management portal, where policyholders can access any document, including renewal notices. Policyholders can, however, withdraw their consent to email delivery at any time and demand paper documents instead.

Under Jackson's original policy, Esurance excluded coverage for any car accident that occurred during any organized racing event inside a racing facility. In February 2010, Esurance expanded this racing exclusion. Now, in addition to a racing event, Esurance could deny coverage for any accident that took place during any racing school, driving school, or other “driver training, skills training” in a racing facility.  

After purchasing his Esurance policy, Jackson renewed it every six months from February 2006 until the end of 2014. During this entire time, he never withdrew his consent to email service. And based on the evidence, he never accessed his online portal—not one single time—or read his policies.

In June 2014, Jackson crashed his vehicle at Pacific Raceways racecourse in Kent during a –you guessed it—driver-skills training event. Jackson sought coverage from Esurance for the damages to his car. And you guessed it—Esurance denied coverage. Jackson sued. The trial court ruled against him and he appealed.

Jackson admitted that he never read his policy documents, but he claimed that Esurance's insurance policy was unenforceable and illegal. He made two main arguments. Fist, he argued, Washington law requires insurance companies to notify policyholders of any policy amendments via registered mail, not email. Second, Esurance's online management system was deceptive because he couldn't easily find his documents. Therefore, Esurance was wrong to have denied coverage for his racing accident.

The Court rejected both his arguments. Washington law does not require insurance companies to send notices via registered mail, the Court ruled. In fact, RCW 48.185.005 specifically states that insurance companies can send all notices and documents electronically. And Jackson, by his own admission, never demanded paper documents.

Second, there was nothing deceptive about Esurance's online system. Jackson never read any of his policies. Between February 2006 and the end of 2010, Esurance sent Jackson 111 emails and Jackson only opened 1 of them. He could have looked through his online portal but never did. The Court basically told Jackson: You screwed up. You didn't read your documents. Don't complain to us. 

Lessons Learned

So what can you take away from this case? Three things, I think:

1. Even if you don't read your entire policy, always pay attention to the renewal notices. Know when things change and know what those changes are.
2. Consider printing out your policy notices and renewal documents so they don't get lost in your sea of emails.
3. If you're overwhelmed by email, consider getting rid of email delivery service for insurance documents. You can always rejoin the paperless revolution another time. It's not going anywhere.