In a case with startling facts leading to worst-case scenario consequences, the Maryland Court of Special Appeals examined whether the insurance coverage of a driver expired just one day prior to a fatal accident. In Price v. State Farm Insurance Company (Md. Ct. Spec. App. September 14, 2015), the driver struck and killed someone crossing the street in a motorized wheelchair. As a result of the accident, the deceased’s heirs and estate filed an injury action against the driver.
In Price, the driver was delinquent in making his premium payment. On January 11, 2012, the insurance company sent a notice that, unless the premium was paid, his policy would be canceled on January 24, 2012 at 12:01 a.m. The letter also stated that, if payment was received any time after that date and time, the insurance company would inform him of whether and when the policy would be reinstated. It specifically added that there would be no coverage between the date and time of cancellation and the date and time of reinstatement.
Sometime on January 24, 2012, the driver’s wife mailed an electronic payment from her back to the insurance company, stating that it was intended to pay for the driver’s policy premium. Although the payment was processed on January 24, 2012, it was not received by the insurance company until January 26, 2012. In addition, the payment was applied to the wife’s, not the driver’s, auto policy. On the following evening of January 25, 2012, the driver hit and killed the deceased.