Insurance Companies Look to Cancel Coverage…

Posted on : November 16, 2015, By:  Mike Saltaformaggio

Insurance companies have one goal in mind: SAVE MONEY.  This is certainly the mindset behind coverage disputes, mainly where the insurance company is looking for a way out and for a reason to cancel its contractual agreements.  It does not matter that you have paid your premium for 52 months straight, or that you have been a loyal, paying customer for years.  All that matters is how, and when, they can save money.  And they will go to great lengths to accomplish this goal.

I am currently litigating several cases where coverage is at issue.  One insurance company is arguing that coverage lapsed at 12:00 a.m. on the date of the incident, which is just hours before the wreck.  In another situation, a different insurance company, albeit with the same goal, is declining to accept coverage and to represent its insured for coverage that allegedly lapsed a day before the wreck.  This leaves the insured in a bad spot, as they have no coverage and could be held personally liable for the injuries and damages sustained by the third party.

Does anyone doubt that, had the wreck not occurred, they would have still tried to collect that premium?  Absolutely not.  That is the business model; more money in and less money out.  But, good thing for patrons of Mississippi, we litigate these issues and we bring the fight to insurance companies.

What must an insurance company do to properly cancel coverage for lapse of payment?

MISS. CODE ANN. § 83-11-5 provides the framework for the proper notice of an insurer’s cancellation of a Mississippi policy. It states:

Notice cancellation.  No notice of cancellation of a policy to which Section 83-11-3 applies shall be effective unless mailed or delivered by the insurer to the named insured and to any named creditor loss payee at least thirty (30) days prior to the effective date of cancellation; provided, however, that where cancellation is for nonpayment of premium at least ten (10) days’ notice of cancellation accompanied by the reason therefor shall be given. . . .

When a policyholder has failed to pay the required premiums, which the insurance company will obviously assert, the statute makes clear that the insurer must give 10-days notice prior to any cancellation of the policy.

More specifically, when a policyholder fails to pay their premiums, an insurer may cancel the policy so long as they (1) mail a notice of cancellation ten days prior to the effective date of cancellation, (2) draft the notice so that it clearly states that the cancellation is a result of the non-payment of insurance premium, (3) ensure that the name and address on the notice of cancellation is the same as on the policy, and (4) obtain a certificate of mailing proving the date of the notice’s mailing. See Gay, 526 So. 2d at 537; Branch, 759 So. 2d. at 433; and Honeycutt, 120 So. 3d at 411.

If you have been injured in a motor vehicle accident and the insurance company is declining coverage to its insured, be sure to call the skilled litigation lawyers of ‘Maggio | Thompson.  We don’t back down from Big Business, and we will be glad to take up the fight.  Call 601-300-3333 for a free consultation today.

 

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