Litigation between an insurer and its insured is always expensive and often unproductive. When insurers and their agents act professionally and provide the service promised, they avoid litigation. Those who are careless, untrained and lack any knowledge of local law and regulations are almost guaranteed to become parties to a lawsuit.
Related: Read Barry Zalma's previous column, "Beware Estoppel."
Insurance companies and insurance agents must be familiar with the statutory law in each jurisdiction where business is done controlling cancellation. Each state has its own rules and regulations concerning proper notice and how that notice must be given. State Farm Mutual Automobile Insurance learned that lesson when its agent failed to enter into its records an insured's change of address. In Andre Banton v. State Farm Mutual Automobile Insurance Co., No. 3D09-3359 (Fla.App. 02/23/2011), the insurer mailed a non-payment notice of cancellation to the insured's prior address. Although the insured had advised the agent of his new address, that information did not make it to the insured. When the agent received a copy of the notice of cancellation, the agent did not advise the company that the address had changed and failed to contact the insured to work around the failure to pay premium. In essence, the agent did nothing.
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