§ 61.10. Nonapplicability of the acts.
(a) Some insurers affect a renewal of their outstanding policies of automobile insurance merely by sending a renewal premium notice to the insured a reasonable period of time in advance of the expiration date of his policy. The insured need only make a timely payment of the premium due in order to keep his policy in force. In such a situation the mailing by the insurer of the renewal premium notice does constitute such a manifestation of willingness by the insurer to renew as to come within the purview of section 6(1) of act of June 5, 1968 (P. L. 140, No. 78) (40 P. S. § 1008.6(1)). If the insured fails to pay the renewal premium when due, the policy shall terminate in accordance with its terms. No further notice to the insured by the insurer of an intention not to renew for nonpayment of premium shall be necessary.
(b) Mere nonpayment of the premium by the insured will not be considered ‘‘such action’’ as to come within the purview of section 6(2) of act of June 5, 1968 (P. L. 140 No. 78) (40 P. S. § 1008.6(2)). Some more affirmative act on the part of the insured shall be necessary, such as a statement by the insured to his agent that he does not want his policy to be renewed or an obtaining by the insured of another policy which he intends shall supersede his current policy.
(c) The 60-day period referred to in section 6(3) of act of June 5, 1968 (P. L. 140, No. 78) (40 P. S. § 1008.6(3)) is intended to provide to insurers a reasonable period of time, if desired, to investigate thoroughly a particular risk while extending coverage during the period of investigation. Should an insurer, after the investigation, conclude that it does not wish to remain on the risk, it may cancel the policy, provided that its action is not in violation of section 3 of act of June 5, 1968 (P. L. 140, No. 78) (40 P. S. § 1008.3). A cancellation of the policy is exempt from the purview of act of June 5, 1968 (P. L. 140, No. 78) by the provisions of section 6(3) thereof except as otherwise provided by this subsection and section 3 of the act of June 5, 1968 (P. L. 140, No. 78). However, for purposes of review by the Department in order to determine whether the action by the insurer is in violation of section 3 of act of June 5, 1968, (P. L. 140, No. 78) (40 P. S. § 1008.3), the cancellation shall be considered to be a refusal to write. Therefore, an individual who has been cancelled by an insurer during this 60-day period may obtain from the insurer the reasons for the action of the insurer and may request a review by the Insurance Department as set forth in section 8(b) of the act of June 5, 1968 (P. L. 140, No. 78) (40 P. S. § 1008.8(b)).
Notes of Decisions Insurance Properly Canceled
An insurance company’s acceptance of an insured’s check, especially a check sent in advance of the insured’s receipt of a payment invoice or renewal premium notice, does not effect a waiver of its right to refuse to renew. To hold otherwise would permit wholesale circumvention of the nonrenewal provisions of Act 78; any time an insured had a second nonexcludable accident within a 36-month period, the insured could circumvent nonrenewal merely by dashing off a check to the insurance company in the amount of his or her last premium, safe in the knowledge that the insurer would probably cash it without immediate inquiry. Musto v. Insurance Department, 683 A.2d 1325 (Pa. Cmwlth. 1996).
‘‘Such Action’’
Where an insurer can show that the premium was proper, the company demanded it, the insured knew it was due but still did not pay it, and the insured’s conduct is not ‘‘mere nonpayment of the premium’’ under 31 Pa. Code § 61.10(b) but is an ‘‘overt action’’ which under 40 P. S. § 1008.6(2) excludes the matter from coverage under the statute (40 P. S. § § 1008.1—1008.11). Federal Kemper Insurance Co. v. Insurance Department, 500 A.2d 796 (Pa. Cmwlth. 1985).
Suspended Driver’s License
Even though the insurer took action to cancel insurance within 60 days of the issuance of a binder, the insurer may not cancel or fail to renew an insurance policy as a result of the suspension of the insured’s drivers license based solely on his conviction for underage drinking. State Farm Mutual Automobile Insurance Company v. Insurance Department, 598 A.2d 1344 (Pa. Cmwlth. 1991).
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