Mother fails to prove entitlement to coverage after untimely payment

The Indiana Court of Appeals affirmed summary judgment in favor of a Hendricks County woman’s insurer on her suit alleging breach of contract after the insurance company declined to cover her son’s auto accident, which occurred after she let her coverage lapse for nonpayment.

Heather Starr-Haller, who had coverage in six-month terms for her 1998 Chevy Blazer, had a history of failing to pay for the coverage from State Farm, which was billed on a monthly basis.

On three occasions in a two-year period, she missed her monthly installment due on her premium, in which State Farm sent her a notice with the amount due and a cancel date. The notices stated that there is no coverage between the date and time of cancellation and the date and time of reinstatement. Whenever she did pay the missed payment, she received a reinstatement notice that again said there was no coverage between the cancellation date and the reinstatement date.

In August 2014, she missed another payment and received another cancellation notice. The cancellation date was Sept. 18. On Oct. 30, she dropped a partial payment off at her State Farm agent’s place of business after business hours. That night, her son was injured in a one-car crash in the Blazer, which was totaled. Starr-Haller sometime thereafter paid the remaining balance, and she claims the policy was reinstated, although it is not supported by the evidence.

She filed a claim with the insurance company, but it denied it on the ground that it had cancelled her coverage and it was not reinstated at the time of the accident. Starr-Haller sued for breach of contract and other claims. The trial court granted State Farm’s motion for summary judgment in December.

Starr-Haller maintained that State Farm waived its right to deny and is estopped from denying her coverage because of the history of reinstating her coverage after she made the payment in full. She claimed because State Farm never refunded her for the time when the insurance had lapsed, it accepted the payments as though she had continuous, uninterrupted coverage.

“State Farm’s actions with respect to the dates that encompassed the October 30 accident were identical to its actions during the three prior occasions in which State Farm had also cancelled Starr-Haller’s coverage. That undisputed evidence plainly shows that State Farm did not intend to relinquish its right to deny Starr-Haller coverage during the period in which those cancellations of coverage had occurred. Likewise, that evidence demonstrates that State Farm’s course of conduct did not knowingly mislead or induce Starr-Haller to believe that she would have retroactive coverage if she did not pay her premium installment when due,” Judge Edward Najam wrote in Bradley Starr by Next Friend Heather Starr-Haller and Heather Starr-Haller v. State Farm Automobile Insurance Company and the Indiana Bureau of Motor Vehicles, 32A05-1605-PL-976.