NOTE – This is from our older court case archives. It may involve situations that are inapplicable to newer coverage forms. Please be aware of this possibility when reading and using this case.

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Cancellation Notice Held Effective Despite Insured’s Absence From Home

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Homeowners Insurance

Cancellation

With respect to the right of an insurer to cancel a homeowners policy, the following provisions in the policy were pertinent: “We may cancel by giving notice of a cancellation to you, at the address shown in the Declarations, not less than 10 days prior to the effective date of cancellation. Proof of mailing will be sufficient proof of cancellation.” (Italics ours.)

Following a series of theft claims and the placing of the covered property for sale with a realtor, the property underwriting manager of the insurance company sent notice of cancellation to the insured’s home address. An effective date was not specified, but it was stated that coverage was cancelled “in accordance with the provisions of the policy contract.” The insureds were out of town at the time, visiting with their son in Texas for an extended period, and had not arranged for the forwarding of their mail. An arson fire damaged the home almost two months after the mailing of the notice. The insureds’ realtor called them in Texas and they found the cancellation notice upon their return.

Having consulted a lawyer, the insureds cashed a premium refund check that accompanied the notice and sued the insurer, alleging that they had never been notified that the policy had been cancelled. The judgment of the trial court was that cancellation had not been effective because the insureds had not been given the required ten days notice, and because they did not actually receive notice of cancellation. The insurer appealed.

The appeal court found the cancellation clause to be “plain and unambiguous.” Proof of mailing was established by the sending of the notice by registered mail. The court concluded that the actual mailing of the notice five days after the date shown on it did not invalidate the notice, which cancelled coverage “in accordance with the provisions of the policy contract.” (ten days after mailing). The loss occurred more than a month after “any conceivable” ten day notice period expired.

The judgment of the trial court was reversed in favor of the insurance company and against the insureds.

Quintana et al., Plaintiffs, Appellees V. Tennessee Farmers Mutual Insurance Company, Defendant, Appellant. Tennessee Court Of Appeals, Middle Section At Nashville. No. 88-367-11. June 1, 1989. CCH Fire And Casualty Cases, Paragraph 1869.