Everest
National Insurance Company sent a notice to an insured stating that his insurance
policy would be canceled if he did not make the payment on the day it was
due. The insured did not make the
payment on time, and he and his wife were subsequently injured when they were
hit by a car. The insured made the
premium payment two days after the accident.
Everest denied coverage for no-fault benefits on the basis that the
insured did not have a valid policy at the time of the accident. The insured and his wife sued Everest, and
the trial court denied Everest’s motion for summary disposition. The Court of Appeals affirmed in a published
opinion, holding that a notice of cancellation sent by an insurer before the
time for making a premium payment does not satisfy MCL 500.3020(1)(b), which provides
that a no-fault policy “may be canceled at any time by the insurer by mailing
to the insured . . . a not less than 10 days’ written notice of cancellation .
. . .” The Supreme Court has ordered oral argument
on the application to address: (1)
whether an insurer may cancel an insurance policy in compliance with MCL
500.3020(1)(b) by mailing a written notice of cancellation to the insured
before the grounds for cancellation have occurred; and (2) whether Everest’s
written notice of cancellation complied with the provision in the insurance
policy that requires “at least 10 days notice by first class mail, if
cancellation is for non-payment of premium.”