Putnam Bancshares, Inc. v. Progressive Classic Insurance Co., 225 W. Va. 279

Summary

The Supreme Court of Appeals of West Virginia held that an automobile insurance policy expired on its stated expiration date when the insured did not timely pay the renewal premium. The insurer was not required to provide cancellation or nonrenewal notice to the insured or loss payee because the policy expired by its own terms rather than being cancelled or affirmatively nonrenewed. The court further held that subsequent reinstatement within the statutory period was not retroactive, leaving no coverage for an accident occurring during the lapse.

Holdings

1. When an automobile liability or physical-damage insurance policy expires on its own terms because the insured did not timely pay the renewal premium, the insurer has no duty under W. Va. Code §§ 33-6A-1 or 33-6A-4 to provide notice that the policy has expired.
2. When an insurer offers to renew an automobile liability or physical-damage policy, but the insured does not accept the offer and the underlying policy expires, W. Va. Code § 33-6A-1a does not require the insurer to notify the loss payee that the policy was not renewed or that coverage expired.
3. An insured may reinstate an automobile liability or physical-damage policy that was not renewed for failure to pay the renewal premium if the insured applies for reinstatement and pays the premium within forty-five days after expiration, but the reinstated coverage is prospective and does not cover the lapse period.
4. A renewal offer accompanied by renewal documentation does not itself constitute issuance of a new policy where the insured has not paid the required renewal premium.

Questions Presented

1. Whether an insurer must provide cancellation notice when an automobile insurance policy expires by its own terms because the insured did not timely accept an offer to renew by paying the renewal premium.
2. Whether the insurer must notify a loss payee that the insured did not renew the policy and that coverage expired.
3. Whether payment of the renewal premium after the accident required Progressive to provide coverage for the accident.
4. Whether the circuit court properly applied Dairyland Insurance Co. v. Conley to treat the renewal offer as issuance of a new policy.

Disposition

reversed_and_remanded