Balboa Ins. Co. v. Hunter, 64788

• Decision Date: 04 January 1983
• Docket Number: No. 64788,64788
• Citation: 165 Ga.App. 273,299 S.E.2d 91
• Parties: BALBOA INSURANCE CO. v. HUNTER.
• Court: Georgia Court of Appeals

Page 91

299 S.E.2d 91

165 Ga.App. 273

BALBOA INSURANCE CO. v. HUNTER.

No. 64788.

Court of Appeals of Georgia.

Jan. 4, 1983.

Lowell S. Fine, Jane F. Thorpe, Atlanta, for appellant.

L. Prentice Eager, III, John W. Henderson, Jr., Atlanta, for appellee.

QUILLIAN, Presiding Judge.

This is an appeal from summary judgment for the plaintiff in an action to recover on an auto insurance policy.

Appellee Hunter had an auto collision insurance policy with appellant insurer and paid the premium through an insurance premium finance company. On January 21, 1980 appellant sent appellee notice of cancellation of the insurance policy effective February 20, 1980 to appellee's last address of record by first class mail. Appellee claims never to have received the notice of cancellation. Thereafter, appellant sent a credit in the amount of the unearned premium to the agent who sold the policy to appellee, who in turn forwarded the credit to the premium finance company. The finance company applied the credit to appellee's account and sent the balance back through the agent to appellee, who received it on April 3, 1980. In the interim, on March 31, 1980, appellee's car was damaged in a collision. When appellant refused payment of the damage because the policy was cancelled, appellee commenced this action to recover on the policy. Cross motions for summary judgment resulted in the grant of such judgment to appellee and denial of same to appellant. Held:

Appellant contends that the trial court erred in granting appellee summary judgment because it had complied with the law concerning cancellation of insurance policies.

Code Ann. § 56-2430 (Ga.L.1960, pp. 289, 671; as amended through 1975, p. 1242) provides: "Written notice, stating the time when the cancellation will be effective, but not less than 30 days from the date of notice ... may be delivered in person, or by depositing such notice in the United States mail to be dispatched by at least first class mail to the last address of record of the insured and receiving therefor the receipt provided by the United States Post Office Department."

Although appellee apparently never received the notice, possibly because he was not residing at his last address of record when it was mailed, actual receipt of the notice is not necessary to effect cancellation if the notice of cancellation properly addressed and stamped for first class delivery was delivered to the postal authorities and a receipt obtained therefor. Hill v. Allstate Ins. Co., 151 Ga.App. 542(2), 260 S.E.2d 370; Favati v. National &c. Ins. Co., 153 Ga.App. 723, 266 S.E.2d 359. Appellant's undisputed evidence showed compliance with this requirement.

Code Ann. § 56-2430, supra, also provides: "Such notice may or may not be accompanied by a tender of the unearned premium paid by the insured calculated on a pro rata basis. If such tender is not made simultaneously with such notice, it shall be made within 15 days of notice of cancellation, unless an audit or rate investigation is required in which case tender shall be made as soon as practicable."

Cancellation also is not effective unless the tender of the unearned premium is made within the prescribed time limits of Code Ann. § 56-2430. Georgia Mut. Ins. Co. v. Frazer, 152 Ga.App. 866, 264 S.E.2d 315.

Appellant did not comply with Code Ann. § 56-2430 because appellee clearly was not tendered the refund of the unearned premium within 15 days of the notice of cancellation, and appellant presented no evidence that an audit or rate investigation was required authorizing a delay in tender of the unearned premium to as soon as practicable after such an audit or investigation.

However, appellant asserts that the foregoing provisions of Code Ann. § 56-2430 are inapplicable where the insured, as appellee did here, finances his insurance premium with a premium finance company, in which circumstance it is required to return the premium to the premium finance company under the provisions of Code Ann. § 84-5313 (Ga.L.1969, pp. 561, 569 as amended through 1976, pp. 1564, 1565), which has no such time provisions.

In other words, appellant urges that the Code Ann. § 56-2430 time provisions for returning an unearned premium should be ignored if a premium finance company is involved. We...