Opinion
41859.
ARGUED MARCH 7, 1966.
DECIDED APRIL 5, 1966.
Action on insurance policy. Muscogee Superior Court. Before Judge Davis.
Dan S. Beeland, James H. Fort, for appellant.
Hatcher, Stubbs, Land Rothschild, Albert W. Stubbs, for appellee.
1, 3. An offer by an insurance company to provide continuous coverage of a policy if the premium is paid within ten days of the expiration date of the policy, which offer is not accepted by the insured within such time by the actual payment of the premium within the time, or its equivalent, does not become a binding contract and the insurance company is not liable for a loss occurring during the ten-day period after the policy's expiration date. The distinction between the above situation and a case where the policy provides for a grace period is that in the latter case the liability for the loss attaches within the grace period without the necessity of the payment of premium.
2. The proof of one late payment of a premium on an insurance policy does not establish a custom of receiving late payments so as to establish a waiver of timely payment. To show such a waiver it is also necessary to show reliance upon a custom. In this case waiver is not shown by the proof of sufficient custom or by proof of a reliance thereon by the insured.
ARGUED MARCH 7, 1966 — DECIDED APRIL 5, 1966.
Mrs. Lucille McClure sued the State Farm Mutual Automobile Insurance Company to recover $5,000 and interest for the accidental death of her son, James McClure, one of the insureds. The action was brought in three counts. The first count alleged that the policy was in full force and effect at the time of the death of James McClure. Count 2 alleged that the policy was still in effect at the death of James McClure on July 26, 1963, although its expiration date was July 18, 1963, because of the fact that the plaintiff had relied upon a practice and course of dealing between her and the insurance company, to wit, the acceptance of late payments of premiums after the expiration of policies. Count 3 alleged that on August 2, 1963, after the expiration of the initial policy on July 18, 1963, and after the death of James McClure on July 26, 1963, the plaintiff applied for, obtained, and paid the premium on a new policy, the effect of which transaction was alleged to have re-instated the old policy and made it retroactive to cover the prior death of James McClure on July 26, 1963. The insurance company made a motion for summary judgment based upon the pleadings, the interrogatories filed by the plaintiff and the answers of defendant thereto, the deposition of the plaintiff and the request for admissions filed by the plaintiff and the responses of the defendant thereto. The trial judge entered a summary judgment in favor of the defendant and the plaintiff appealed.
1. The court did not err in rendering the summary judgment for the defendant under the first count. From the evidence before the trial judge it appeared that the policy of the insurance company was evidenced by a statement upon the company's premium receipt, premium notice, or notice of expiration of policy, where there were stated the three following propositions: "Payment within ten days after due date will renew your policy and provide continuous protection." "If payment is not made within ten days after due date, protection will be reinstated as of the date and time payment is postmarked." It was also the policy of the company to accept premiums within thirty-nine days of the expiration date of the policy but to provide continuous protection only if the premium was paid within ten days of the expiration date of the policy. Appellant contends that the company policy to provide continuous protection if the premium was paid within 10 days from the expiration date of the policy to be renewed constitutes a "grace" period. We think this position is untenable. There is no provision for a "grace" period in the policy. The policy of the company to provide continuous protection if the premium was paid within 10 days after the expiration date of the policy constituted an offer by the insurance company to the insured which required acceptance of the insured by the actual payment of the premium, or part thereof, possibly, in order to constitute a contract. There is no showing in this case whatsoever that the premium was paid or tendered to the insurance company within the 10-day period in which continuous protection could be procured. Neither is there any fraud alleged against the insurance company, nor any other fact, which in law could be said to have deterred the plaintiff from paying the premium within the said 10-day period. The rule which applies to an event's occurring within a "grace" period provided in an insurance policy does not apply in such a case as this where there is no binding contract on the part of the insurance company to pay a loss occurring within the "grace" period. The situation in this case is that the insurance company offered the insured the opportunity to buy and pay for protection during the 10-day period by the actual payment of the premium. This offer the insured did not accept and it follows that the insurance company was not obligated to pay the loss under count 1.
2. The court did not err in granting a summary judgment for the defendant under count 2 of the petition. In the first place, this was a one-premium policy for a 12-month period which had expired. Construing the deposition of the plaintiff most favorably to her, she had had three policies of insurance with the defendant, one of which was the policy sued on and another was the policy issued to her on August 2, 1963, after the death of James McClure. This would mean that she could have had only one experience in paying a late premium to the defendant. The proof of one late payment is not sufficient to establish a custom which could result in the waiver of the requirement of prompt payment. 2 Couch on Insurance 6, § 32:391; Phoenix Mutual Life Ins. Co. v. Feeney, 67 Ga. App. 457, 460 ( 21 S.E.2d 106); Sovereign Camp W. O. W. v. Whitaker, 57 Ga. App. 418 ( 195 S.E. 584); 29A Am. Jur. 200, Insurance, § 1092; 45 CJS 679, Insurance, § 712; Progressive Life Ins. Co. v. Reeves, 89 Ga. App. 900, 903 ( 81 S.E.2d 519); Davenport v. Metropolitan Life Ins. Co., 55 Ga. App. 553, 554 ( 190 S.E. 872). In addition to the above, in order for a late payment to be shown to have been waived the insured must show reliance upon the custom of the insurance company in receiving late payments. 2 Couch on Insurance 6, § 32:378; Bankers Health c. Ins. Co. v. Givvins, 12 Ga. App. 378-380 (77 S.E. 203); Life Insurance Co. of Va. v. Bartlett, 37 Ga. App. 22, 23 ( 138 S.E. 589); 45 CJS 679, Insurance, § 712; 29A Am. Jur. 200, Insurance, § 1092. There is no showing in this case whatsoever as to reliance on any such custom.
3. The court did not err in granting a summary judgment for the defendant in count 3 of the petition. The policy issued on August 2, 1963, after the death of James McClure on July 26, 1963, was not retroactive, even assuming that it was a word-for-word renewal of the first insurance policy, except that the last policy insured another automobile procured by the plaintiff in lieu of the one formerly insured, for the reason that the premium on this last policy was not paid within 10 days from the expiration of the original policy. We think that we have sufficiently covered this ground in our ruling as to the grant of the summary judgment in count 1.
The court did not err in rendering a summary judgment for the defendant insurance company and none of the other questions raised in the case needs be considered.
Judgment affirmed. Frankum and Pannell, JJ., concur.