The insured held a commercial auto policy issued on June 5, 2006 by Infinity General Insurance Company. See Infinity Gen. Ins. Co. v. Reynolds, No. 08-14785 (11th Cir. June 8, 2009) [here]. The premium was overdue as of July 5, 2006, and a cancellation notice was sent July 10, 2006. The notice indicated that coverage would cease at 11:59 p.m. on the cancellation date, July 25, 2006, unless the premium payment was received before the cancellation date.
Thereafter, the insured's son was involved in an auto accident on August 2, 2006, fatally injuring his two passengers. The insurer maintained there was no coverage because the policy had been canceled.
The insurer filed for declaratory relief. The district court granted summary judgment to the insurer, concluding there were no genuine issues of material fact because the premium had never been received and the policy was canceled.
On appeal, the Eleventh Circuit considered whether under Georgia law the insurer effectively canceled the policy. A state statute seemed to favor the insurer, providing an effective cancellation notice must be mailed at least ten days prior to the effective date of cancellation. Georgia case law provided, however, that a notice of cancellation stating a policy will be canceled on a specific date unless premiums due are paid prior to that date was not a notice of cancellation, but a demand for payment. Accordingly, the insured argued the notice, which demanded payment, did not cancel the policy on July 25, 2006.
The insurer argued the case law was not relevant because the notices of cancellation there had been given before the premium was due, unlike the situation here. The purpose of the statute was to provide the insured with an opportunity to make the premium payment before cancellation and keep the policy in force.
The Eleventh Circuit decided the case law was unclear and certified the following question to the Georgia Supreme Court:
Is a notice of cancellation, properly given after the premium is past due, ineffective because it provides an opportunity for the insured to keep the policy in force by paying the past-due premium within the statutory ten-day period?
