Court Opinion

ID: 9567169
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:50:01.006582+00
Date Added: 2024-06-11T10:00:17.742136
License: Public Domain

Bell, Chief Judge.
I dissent and would affirm the grant of defendant’s motion for summary judgment. The issue concerns that part of the policy which provides for termination of individual insurance. It states: "The insurance of a debtor shall automatically terminate upon the earliest of the following dates . . . (d) the date the debtor’s indebtedness becomes in default for more than three months.” It is undisputed that at the time of his death plaintiffs husband’s loan accounts had been in default more than three months; and that no written notice of cancellation of insurance under Code Ann. § 56-2430 was ever furnished the deceased. Plaintiff argues *635that the failure to give notice of cancellation as required by the above statute operated to continue the coverage. Code Ann. § 56-2430 provides in part: "Cancellation of policy which by its terms and conditions may be canceled by the insurer shall be accomplished as prescribed herein: written notice, stating the time when the cancellation will be effective,...” Defendant’s position is that this statute does not apply where the policy as in this case provides for an automatic termination upon the happening of an event specified by the contract. We believe that this contention is correct. The notice of cancellation statute applies to policies where the policy grants the insurer an option to cancel and not in a situation where the contract expressly states that the coverage is "automatically” terminated upon the happening of a specified event. The statute itself clearly enunciates a legislative intent that it only should apply to a "policy which by its terms and conditions may be canceled by the insurer.” The use of the word "may” in this context implies permission or the exercise of discretion by the insurer when the policy grants to it a right to cancel if it elects to do so. If a right to cancel by the terms of the policy is not exercised, then coverage continues. But here the policy provided for an automatic termination when the insured debtor became more than three months in default. No affirmative action of the insurer was required to effect a termination as opposed to a policy provision which permits the insurer to exercise a right to cancel or terminate if it chooses to do so.
I am authorized to state that Judges Quillian and Stolz concur in this dissent.