State Farm Automobile Insurance provided for three of the vehicles belonging to Plaintiff Jones.  However, on November 5, 1999, State Farm sent a cancellation notice informing Mr. Jones that “effective November 24th, 1999,SC Personal Injury Attorney coverage of the 1986 Mazda would be cancelled due to nonpayment of premiums.”  Forward to December 19, 1999: Jones is seriously injured in a car wreck while driving the Mazda.  Thereafter, a State Farm agent signed a FR-10 form stating that “I hereby affirm that to the best of my knowledge the vehicle described above was insured by State Farm insurance company on the date and time of the accident.”

After settling with the carrier of the other driver, Mr. Jones attempted to seek a declaration that the Mazda was covered at the time of the collision, and that he was “entitled to the underinsured coverage and entitled to stack his other two policies.  However, the trial judge ruled in favor of State Farm and was entitled to summary judgment because the cancellation notice complied with S.C. Code Ann. 38-77-120, and the Form FR-10 did not affect the cancellation.

The case finally reached the South Carolina Appellate court where, the court affirmed, finding that the cancellation notice complied with the SC Code section.  The court agreed with State Farm that an insurer is not required to inform the insured he/she has not been ceded to the South Carolina Reinsurance Facility.  Therefore, summary judgment was granted in favor of State Farm without regard to the FR-10, because the form did not raise an issue as to the validity of the cancellation notice.

Moral of the Story:  If you receive a cancellation notice in the mail, do not expect to garner any benefits from your insurance company as a result of a collision caused thereafter.  This is regardless of fault.  If State Farm had failed to send out the cancellation notice, the Plaintiff would have likely succeeded in this scenario; however, the notice was the document that proved to be the straw that broke the camels back in this case.

If you or a loved one has been involved in a similar situation, it is important for a professional to take a look at the case.  If the cancellation notice was sent after the accident, the person is still covered and he/she may be entitled to monetary compensation from the insurance company.  Contact the law offices of Reeves, Aiken & Hightower, LLP if you have a question regarding a pending insurance issue and we will determine the likelihood of success in your situation.  For a consultation, contact our York County, South Carolina office at 803-548-4444.