Article Archives >> Lead Stories >> September 1-15, 2009
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Is Fire Insurance Good
When Premium Bounces?
Carrier sent notice of reinstatement subject to collection,
but payment was dishonored two days after the fire
The nonprofit Cabana Club in Salt Lake City maintained a commercial package insurance policy with the Travelers that could be terminated for failure to pay the premiums. On October 1, 2007, Travelers sent a notice of cancellation stating that it had not received a premium due and that the policy would be cancelled on October 21 if it did not receive the premium by that date.
On October 16, the Club authorized Travelers to deduct the $475.27 premium from its bank account, and Travelers sent a notice that the insurance was reinstated, so long as the payment was honored by the bank. On October 23, the bank dishonored the payment for insufficient funds. On October 30, Travelers notified the Club that its payment was dishonored and the reinstatement notice was “null and void.”
Article Archives >> Lead Stories >> September 1-15, 2009
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