Michigan Court of Appeals; Docket No. 123297; Published
Judges Weaver, MacKenzie, and Fitzgerald; Unanimous; Per Curiam
Official Michigan Reporter Citation: 193 Mich App 716; Link to Opinion
Cancellation and Rescission of Insurance Policies
In this unanimous per curiam Opinion dealing with cancellation of an insurance policy, the Court of Appeals held that plaintiff’s insurance coverage was effectively canceled as of the date he was involved in an accident where plaintiff had both orally and in writing canceled his insurance policy on July 23, stating he wished the cancellation to be effective July 25. It was plaintiff’s intention to discontinue his coverage so that he would not have to pay premiums on vehicles he was intending to store. Subsequently, however, plaintiff’s insurance company erroneously canceled the policy of another person with the same name as plaintiff and then, on August 12, sent a premium notice to plaintiff which was paid by plaintiff’s mother on August 18. With this premium payment, plaintiff’s insurance was theoretically paid through September 12. On September 7, plaintiff was involved in a serious accident sustaining permanent injuries. Plaintiff notified his insurance company on September 15 of his accident, and on November 26, his insurance company issued a cancellation memo implementing the cancellation that plaintiff had requested orally and in writing in July and refunded the remaining portion of plaintiff’s premium.
The court held that in spite of the fact that plaintiff’s mother had paid the premium, neither she nor the agent who accepted the premium had the authority to reinstate plaintiff’s policy after plaintiff had orally and in writing demanded its cancellation. The court relied upon Blekkenkv Allstate Insurance Company, 152 Mich App 65 (1986), and held, "Michael Collins both orally and in writing canceled his no-fault policy on July 23. He stated that he wished the cancellation to be effective July 25. Frankenmuth's agent, the Schemm Agency, accepted the cancellation and promptly forwarded the written cancellation to Frankenmuth. The insurer, and its agency, were simply without authority to reinstate the policy or continue it contrary to Michael Collins' expressed wishes. Furthermore, the delay in sending a cancellation memo and refunding the balance of Michael Collins' premium after its cancellation does not warrant treating the policy as continuing in force. Under MCLA 500.3023(1)(a), the insured's freedom to contract and to avoid unneeded or unwanted premiums includes the right to unilaterally cancel the policy of insurance, and that cancellation is effective upon the insured so declaring."