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Insurer Might Be Liable Under Policy Not in Effect When Fire Occurred—C.A.
By a MetNews Staff Writer
An insurer that cancelled a policy based on non-payment of premiums, then reinstated it after back payments were made, might have to reimburse its insured for damage caused by a fire that occurred during the period when the policy was out of effect, Div. Two of the First District decided yesterday.
The opinion by Acting Presiding Justice James Richman affirms an order by Sonoma Superior Court Judge Elliot L. Daum denying summary judgment or summary adjudication Mid-Century Insurance Company and reverses an order granting summary adjudication to the insureds, Ted and Susie Antonopoulos.
The couple’s homeowner’s policy was cancelled on Oct. 3, 2017; six days later, a fire destroyed their home; on Oct. 12, their claim was denied because the policy was no longer in force; the same day, they made an electronic payment of the past-due amount, $569.51, and the policy was reinstated.
Richman’s Opinion
Richman said:
“[W]e reach a different conclusion than the trial court—that the evidence and reasonable inferences raise a triable issue as to whether Mid-Century intended to retroactively reinstate the policy without a lapse.”
Competing inferences can be drawn from the facts, he observed.
The justice noted that on Oct. 17, Mid-Century sent the insureds a “Home Insurance Reinstatement” which stated the effective date to be Oct. 12 with the expiration being April 17, 2018, nine days later than in the original policy, while a Nov. 10 “Home Insurance Policy Reprint,” by contrast, said the past effective date of the policy was November 9.
The facts relied upon by Daum, he said, were that the “policy reprint” contained a declaration page that pegged the effective date as April 17, 2017, and the policy alluded to structures that no longer existed. Also, Richman pointed out, Mid-Century retained the entire $569.51 rather than refunding the amount correlating to the none-day lapse.
Not Only Inference
Evidence relied upon by Daum “indeed supports an inference,” Richman said, “that Mid-Century had decided to reinstate the policy with retroactive coverage for the period the policy was out of force,” but declared that it “is not the only reasonable inference” that can be drawn in light of the other evidence.
Mid-Century also argued that it cannot be liable under the policy based on the “loss-in-progress” rule. It drew attention to §22 and §250 of the Insurance Code both of which limit coverage to “a contingent or unknown event” and, it argued, when the policy was reinstated, the fire was a known past event.
Richman responded:
“But the loss-in-progress rule did not apply for a simple reason: plaintiffs’ loss did not occur before the policy was issued, which occurred when the policy renewed on April 8, 2017—six months before the loss. What incurred on October 12 was reinstatement of the prior policy.”
The case is Antonopoulos v. Mid-Century Insurance Company, A160360.
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