Andrea Mead and her husband sued to recover for damage to their condominium. Their condo was damaged by a fire on December 4, 2012. They filed a claim with Travelers Indemnity Company of Connecticut, Inc. (Travelers). The claim was denied with the insurer stating that the policy had been canceled on October 28, 2012 due to nonpayment of premium.

Mead’s coverage for the condo was written by Travelers under a Condo Association Policy that was renewed for the Petwin Unit Owners Association. The renewal policy was effective 9/8/12 to 9/8/13. A premium payment of $1,457 was due on 9/8/12, but was not paid on time.

Documents exist which show that the condo unit owners responded to a cancel notice by, twice, trying to make a late payment over the phone. Both times, because of lack of a proper account number, the condo owners’ bank refused to process a payment. Shortly after the second attempt to make payment, the December fire occurred. While the insurer did send an adjuster to open a claims file, the insurer, after no payment was received during several payment extensions, upheld the notice cancelling coverage as of October 28, 2012.

Mead, et al sued for bad faith and also argued that the insurer’s actions estopped it from cancellation. Mead based its position on the insurer’s failure to send 5 days advanced notice of cancellation to the insurance agent/broker and its sending an adjuster out to examine the loss.

The court examined the arguments and counter arguments. In its view, whether advanced notice was sent would be a matter subject to jury review. Regardless, it held that, as there was proof that all parties did receive ample notice of cancellation and that, even after several extensions were given, the premium remained unpaid on time, the cancellation was valid. Further, the insurer’s act to investigate the loss, even to the point of concluding that, if not for cancellation, the damage would be eligible for coverage, did not rise to estoppel.

The court granted summary judgment in favor of the insurer, dismissing all of the plaintiffs’ arguments.

Andrea Mead, et al., v. Travelers Indemnity Co. of Connecticut, Inc. U.S. Third District Court (Pennsylvania) No.14-2695. March 17, 2015. 2015 Westlaw 1229912