SOUTHERN GROUP INDEMNITY, INC., APPELLANT,
v.
ROBERT CULLEN, JOANN CULLEN, CHERYL CULLEN, CARL PICERNO, BRENDA PICERNO, GIBRALTAR BUDGET PLAN, INC, AND NORTHLAKE AUTO INSURANCE AGENCY, APPELLEES
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Southern Group Indemnity appeals a trial court decision holding that an automobile insurance policy remained in effect on the date of an accident, despite a premium finance company's attempt to cancel it. The court affirms, holding that under Florida statute and the policy's advance notice requirement, cancellation could not become effective until the insurer actually received notice of cancellation.
Cancellation by a premium finance company cannot become effective until the insurer receives notice of cancellation. Under Florida Statute § 627.848(1)(d), the policy's advance notice requirement for cancellation by the insured applies equally to cancellation by a premium finance company exercising power of attorney. Therefore, coverage existed on January 6, 1995, when the accident occurred.
[1] An automobile liability insurance policy cannot be effectively cancelled by the insurer without providing the insured with a notice of cancellation in accordance with sta…
[2] Florida Statutes § 627.728 requires insurers to provide notice to the named insured before cancelling a policy for nonpayment of premium, regardless of premium finance co…
Previewing 2 of 6 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“upon receipt of a copy of the cancellation notice by the insurer or insurers, the insurance contract shall be canceled with the same force and effect as if the notice of cancellation had been submitted by the insured himself”
Establishes that cancellation effectiveness is triggered by the insurer's receipt of the cancellation notice, not by notice to the insured or the effective date stated in the notice
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Join FLexlaw to unlock all legal intelligenceSouthern Group Indemnity issued an auto insurance policy to the Cullens and Picernos, with premiums financed by Gibraltar Budget Plan, Inc. The insure…
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ON MOTION FOR REHEARING
KLEIN, J.
We withdraw our previously filed opinion dated July 17, 2002 and replace it with the following.
This appeal presents the issue of when the notice of cancellation of automobile insurance given by a premium finance company can become effective. We conclude that, because of an insurance policy provision, this policy could not be cancelled prior to the insurer receiving the notice of cancellation. There was, accordingly, coverage for an accident.
The insurer was Southern Group Indemnity, and the premiums were financed by Gibraltar Budget Plan, Inc. About two months before the accident the policy was renewed and the insured agreed to make nine monthly payments starting on December 5, 1994. Gibraltar paid the premium six months in advance. As part of the financing agreement the insured gave Gibraltar a power of attorney to cancel the policy for non-payment.
When the insured failed to make the first payment due December 5, 1994, Gibraltar sent the insured a notice of intent to cancel the policy in ten days. On December 22, no payment having been made, Gibraltar sent a notice of cancellation to the insured stating that the policy would be canceled on January 5, 1995. These were not sent to the insurer. On January 5, 1995, Gibraltar sent the insurer a request for policy cancellation as of January 5. That notice was received by the insurer on January 9, but the accident occurred on January 6. The trial court held the insurance was still in effect on January 6.
Cancellation of a policy by a premium finance company is addressed by section 627.848, Florida Statutes (1995). The statute provides that the insured must be given ten days notice after which the premium finance company shall mail a request for cancellation to the insurer. The statute further provides that “upon receipt of a copy of the cancellation notice by the insurer or insurers, the insurance contract shall be canceled with the same force and effect as if the notice of cancellation had been submitted by the insured himself.” § 627.848(l)(c).
The insurance policy contained the following provision for cancellation by the insured:
5. After this policy has been in effect for two months:
a) The named insured shown in the Declarations may cancel by:
(1) returning the policy to us; or
(2) giving us advance written notice of the date cancellation is to take effect.
Policy cancellation requirements are incorporated in section 627.848(l)(d), which provides:
All statutory, regulatory, and contractual restrictions providing that the insured may not cancel her or his insurance contract unless she or he or the insurer first satisfies such restrictions by giving a prescribed notice to a governmental agency, the insurance carrier, a mortgagee, an individual, or a person designated to receive such notice for such governmental agency, insurance carrier, or individual shall apply when cancellation is effected under the provisions of this section.
Accordingly, under the statute the advance notice cancellation requirement contained in the policy applies to the premium finance company. The company could not, therefore, make cancellation effective prior to the insurer receiving notice of the cancellation. The insurer’s argument is that, because the insured had already been notified that the policy would be canceled on January 5, the premium finance company, Gibraltar, could make cancellation of the policy effective on January 5, even though the insurer did not receive notice of cancellation until January 9. That argument cannot be reconciled with the advance notice requirement of the policy which is applicable by statute to the premium finance company. Nor do we see any reason why the insurer should feel aggrieved by having to provide coverage, since the premium, which had been advanced by the finance company, was current.
Affirmed.
POLEN, C.J., and TAYLOR, J., concur.
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Miller v. Scottsdale Ins. Co., 932 So. 2d 1028 (Fla. 2006)…’s verdict that an insured’s efforts to cancel its own insurance policy were ineffective when the insurer had not provided the mortgagee and loss payee with proper notice of cancellation. Id. at 575-76.6 In Southern Group Indemnity, Inc. v. Cullen, 831 So. 2d 681 (Fla. 4th DCA 2002), the Fourth District addressed a situation in which a notice of cancellation by a premium finance company, acting as the attorney-in-fact for the insured, requested a cancellation date prior to the date on which the notice was re…1 / 2
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Miller v. Scottsdale Ins. Co., 410 F.3d 678 (11th Cir. 2005)…mplates separate dates of cancellation for different insureds or requires a single cancellation date. Although there is no Florida case on all fours, several Florida decisions have interpreted § 627.848. In Southern Group In dem., Inc. v. Cullen, 831 So. 2d 681 (2002), the premium finance company sent a notice of cancellation to the insurer because the insured failed to make the first premium payment. 831 So. 2d at 682. The notice of cancellation purported to cancel the policy prior to the date on which t…