An Insurer May Waive its Right to Enforce Cancellation of a Policy
Madeline Edwards was injured in a car accident, in which the car was previously covered by a State Farm automobile policy. She purchased an insurance policy and failed to pay the premium on time. State Farm mailed Edwards a written cancellation notice and informed her that if she paid the premium after a certain period, the policy would be reimbursed but she would have no coverage from the date of cancellation to the date of reimbursement. She brought an action against State Farm Insurance Company to determine whether State Farm would be liable to pay damages arising from the accident that occurred after the insurance policy had lapsed and was cancelled for nonpayment. The circuit court found that State Farm had waived its legal right to enforce the cancellation.
The issue on appeal was whether the cancelled automobile policy, when reinstated by State Farm following plaintiff’s tendering of a late payment, became retroactive and should have covered the auto accident. The court held that summary judgment in favor of Edwards was not appropriate because none of the facts were materially sufficient to support an allegation of State Farm’s actual waiver. There was nothing unclear about the language that suggested the reinstitution of the policy was retroactive.
Edwards v. State Farm Ins. Co., 2012 WL 1956446, —N.E.2d —- (Ill.App. 1 Dist., 2012), No. 1-11-2176.
