There is no requirement in Ohio on the method of mailing to be used for an auto insurance premium refund following cancellation. The statute provides that "Prior to the effective date of cancellation, the insurer shall tender to the insured any refund premium and other sums which may be due the insured."

If a carrier wants to clearly meet the burden of proof that they tendered the refund, they could send it certified mail with a return receipt. A return receipt signed by the insured creates conclusive proof that the refund was sent and received on a timely basis. This is an expensive method of mailing. To save costs, carriers typically send refunds by ordinary U.S. mail. Considering that most cancellations are nonpayment of premium, and in that instance you should not have any refund due, the carrier is risking disputes regarding premium refunds on low frequency occurrences such as termination for material misrepresentation in the application, or cancellation following the loss of driving privileges by an insured. A cost-risk/benefit analysis leads many carriers to a business decision that ordinary U.S. mail is appropriate.

If a carrier wants to clearly meet the burden of proof that they tendered the refund on a timely basis, they could send it certified mail with a return receipt. A return receipt signed by the insured creates conclusive proof that the refund was sent and received by a certain date. A less costly option is a U.S. postal Certificate of Mailing. Carriers typically use a Certificate of Mailing as their proof of mailing on the cancellation notice. The same method of mailing may be used for refunds. If an insurer is in court fighting with an insured who denies receipt of the refund, a Certificate of Mailing serves as presumptive proof that the carrier met their legal obligation and sent the refund on a timely basis to the insured, and this proof may be more persuasive with a judge than mere testimony that the business records establish when the refund was mailed. The business records showing when a refund was issued and sent by ordinary U.S. mail can often be as persuasive as the Certificate of Mailing. Since expenses are passed on to policyholders as higher premiums, many carriers prefer to avoid the expensive mailing processes and rely upon their business records and testimony as to their internal procedures if they need proof of mailing premium refunds.

© 2007 The Nash Group, LLC

This information does not constitute legal advice. Persons using this website are strongly advised not to act on the information contained in it without seeking legal counsel or engaging The Nash Group, LLC.

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