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Peterson v. West American Insurance Co.6/1/1999
t American's failure to notify the Highway Department continued the policy in effect.
A. Failure to notify Highway Department of voluntary cancellation.
We hold Walker's voluntary cancellation of her insurance policy absolved West American's responsibilities under §§ 56-10-240 and 56-10-40 because these provisions apply when the insurer cancels or refuses to renew a policy, not when the insured voluntarily cancels a policy.
Section 56-10-240 provides in pertinent part:
(A) If, during the period for which it is licensed, a motor vehicle is or becomes an uninsured motor vehicle, then the vehicle owner immediately shall obtain insurance on the vehicle or within five days after the effective date of cancellation or expiration of his liability insurance policy surrender the motor vehicle license plates and registration certificates issued for the motor vehicle. If five working days after the last day to pay an automobile liability insurance premium . . . a motor vehicle is an uninsured motor vehicle, the insurer shall give written notice . . . within ten days after the five-day period ends . . . to the department of the cancellation or refusal to renew under the following circumstances:
(1) the lapse or termination of such insurance or security occurs within three months of issuance, provided that this subsection only applies to new policies, and not renewal or replacement policies; or
(2) the lapse or termination occurs after three months for a resident who fails one or more of the objective standards prescribed in Section 38-73-455.
(B) The department, in its discretion, may authorize insurers to utilize alternative methods of providing notice of cancellation of or refusal to renew to the department. The department may not reissue registration certificates and license plates for that vehicle until satisfactory evidence has been filed by the owner or by the insurer who gave the cancellation or refusal to renew notice to the department that the vehicle is insured. . . . The department shall give notice by first class mail of the cancellation or suspension of registration privileges to the vehicle owner at his last known address. S.C. Code Ann. § 56-10-240 (Supp. 1998) (emphasis added).
This provision explicitly references only an insurer's cancellation notice. The emphasized portion illustrates how the provision focuses on instances where the insurer cancels or refuses to renew a policy and provides no specific reference to an insured's decision to cancel. Thus, we find § 56-10-240 applicable when an insurer cancels or refuses to renew a policy, but not applicable where the insured voluntarily seeks to cancel an insurance policy.
Section 56-10-40 permits a similar inference. Section 56-10-40 provides in relevant part:
Every insurer writing automobile liability insurance in this State and every provider of other security approved and accepted by the director or his designee in lieu of such insurance shall immediately notify the department of the lapse or termination of any such insurance or security issued to or provided for a resident of this State in the following circumstances:
(1) the lapse or termination of such insurance or security occurs within three months of issuance provided that this subsection only applies to new policies, and not renewal or replacement policies; or
(2) the lapse or termination occurs after three months for a resident who fails one or more of the objective standards prescribed in Section 38-73-455.
This notification must be in writing or magnetic media in a manner considered satisfactory to the department. Upon rece
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