Michigan Court of Appeals; Docket No. 138086; Unpublished
Judges Griffin, Reilly, and Fitzgerald; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Cancellation and Rescission of Insurance Policies
CASE SUMMARY:
In this unanimous per curiam Opinion, the Court of Appeals addressed the issue of whether a notice of cancellation must be sent to a policyholder to effectively terminate coverage where the policy term of six months has ended.
Defendant issued to plaintiff a policy of no-fault automobile insurance with a policy term from March 5, 1987 through September 5,1987. Prior to the expiration of the policy, defendant sent to plaintiff a notice stating that renewal would take place only if an additional premium was paid. On September 9,1987, four days after the term of the policy ended, defendant sent to plaintiff a "confirmation of non-renewal" notice stating that the policy had not been renewed, but if payment of a premium was received by September 25, 1987, the policy would be reinstated retroactively to September 5,1987 with no loss of coverage. However, plaintiff did not pay an additional premium. Plaintiff was involved in an accident which occurred on December 1,1987 and sought coverage under the policy for losses arising out of the accident.
Defendant filed a motion for summary disposition as to its liability under the policy, contending that it had terminated by its terms prior to the accident. The trial court denied defendant's motion for summary disposition on the grounds that defendant may have waived the right to cancel its policy without notice because it actively sought plaintiff’s continued patronage and had offered to extend "credit" to plaintiff through an installment plan for the payment of premiums. In reversing, the Court of Appeals held that a cancellation notice was not required in this case because the policy term had expired. Under these circumstances, the court held that MCLA 500.3020(1)(b) did not require the defendant insurer to send a cancellation notice in order to effectively terminate the coverage.
The Court of Appeals further held that the defendant insurer did not waive its right to automatic expiration when it continued to offer and extend credit to plaintiff to obtain retroactive coverage. The court found that defendant offered to extend coverage only if an unpaid premium, plus a renewal premium, were paid and it was undisputed that plaintiff had not made such payment
