The U.S. Tenth Circuit Court of Appeals upheld a grant of summary judgment in favor of an insurer regarding the cancellation of a policy based on policy provisions and the date of mailing of notice of cancellation. Self v. Travelers Indemnity Company, 2016 WL 3397698 (10th Cir. June 14, 2016).
The insured purchased a vehicle for her stepson and obtained insurance for a six-month period. The insurer generally contacted its insureds after issuance of a policy to conduct a welcome interview and to verify certain policy information for underwriting purposes. The insured did not respond to such a request, and the insurer sent a notice of cancellation to the insured, citing the insured’s failure to respond to inquiries for an initial customer interview as the basis. The notice identified an effective date of cancellation.
The policy set forth procedures for cancellation by the insurer: “We may cancel by mailing to the named insured shown in the Declarations at the address shown in this policy: a) At least 10 [days’] notice: (1) if cancellation is for nonpayment of premium; or (2) if notice is mailed during the first 60 days this policy is in effect…; or b) At least 20 [days’] notice in all other cases.” The same provision also stated: “3. After this policy is in effect for 60 days … we will cancel only: a. For nonpayment of premium; or b. If your driver’s license or that of [certain other related drivers] has been suspended or revoked … c. For fraud, misrepresentation or concealment….”
After the effective cancellation date, the insured’s stepson was involved in an accident. A claim was submitted and the insurer denied the claim based on the cancellation and lack of reinstatement. The insured filed suit alleging that the insurer’s cancellation was ineffective because the date of cancellation was the 66th day of the policy term and the policy was not cancelled for any of the allowable reasons for a policy in effect 60 days. The court found the cancellation provision unambiguous and held that the provisions allow the insurer to cancel “by mailing to the named insured…at least 10 [days’] notice … if notice is mailed during the first 60 days this policy is in effect,” which the court found had occurred.