Penn. Supreme Court Upholds Ruling on Weekend Payment of Premiums

May 30, 2001

The Pennsylvania Supreme Court has let stand an appellate court ruling in favor of an insurance company that had canceled an insurance policy for non-payment of a premium that was due on a weekend.

The trial court, the Court of Common Pleas of Beaver County, had ruled that Progressive Insurance Co. had acted in bad faith by canceling the policy of Kelly and Linda Morrison and awarded the Morrisons $200,000 in punitive damages.

The Superior Court reversed that decision, and the Supreme Court has allowed that reversal to stand.

The Morrisons had argued the premium was due on March 3, 1996, a Sunday, and was, therefore, payable on the following day, March 4. The Superior Court said the cancellation notice did not specify the premium was due on a Sunday and that payment should have been received before March 3 and, therefore, was due on March 2 and the cancellation was valid.

According to Robert Hurns, National Association of Independent Insurers (NAII) counsel, if the Supreme Court had accepted Morrisons’ argument, every cancellation issued by every carrier in Pennsylvania that was effective on a Sunday would be invalid.

NAII filed a legal brief in support of Progressive.


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