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Peterson v. West American Insurance Co.6/1/1999
ct. See Fidelity & Cas. Ins. Co. v. Nationwide Ins. Co., 278 S.C. 332, 295 S.E.2d 783 (1982). In Fidelity, the South Carolina Supreme Court analyzed prior versions of § 56-10-40 [formerly § 56-11-220] and § 56-10-240 [formerly § 56-11-740]. The court held § 56-11-740 required the insured, rather than the insurer, to serve notice of the cancellation to the Highway Department because at the time the cause of action arose the statute required notice from the insured. The court noted the statute had since been amended to provide the insurer was to give notice to the Highway Department in the event of a cancellation of coverage. Next, the court held § 56-11-220 required notice of a cancellation, but did not continue the policy in effect when the insurer failed to properly notify the Highway Department absent an explicit statement providing for such effect. Fidelity, 278 S.C. at 334-35, 295 S.E.2d at 784-85 ("Nothing in this statute specifically states that failure to notify as required continues the policy in effect."). Neither of the current statutes, § 56-10-40 and § 56-10-240, provide for a policy's continuation if an insurer fails to give notice under the provisions.
Although Peterson contends Fidelity did not require notice under the former § 56-11-740 only because the statute then referenced notice by the "insured" rather than the "insurer," we hold the court's subsequent Discussion regarding § 56-11-220, with nearly identical provisions to our current § 56-10-40, governs the case sub judice. Therefore, we hold that even if the statutory provisions applied to West American, failure to properly notify the Highway Department of the cancellation of Walker's insurance policy did not continue the policy in effect.
II. Did the court err in finding the policy was properly cancelled in accordance with the relevant policy and statutory provisions?
Peterson further contends Walker's attempt to cancel her policy was invalid because the policy and the corresponding statutory provision prevent cancellation within sixty days of the policy's issuance. We disagree.
The relevant provision in Walker's insurance policy concerning cancellation of the policy states as follows:
During the first 60 days this policy is in effect, the policy may be cancelled only if:
a. a check or bank draft tendered for payment of premium is returned unpaid for insufficient funds or other reason by the financial institution; or
b. You furnish proof from the Department of Highways and Public Transportation that:
(1) the "your covered auto" shown in the Declarations has been sold or otherwise disposed of; or
(2) you have surrendered the tags and registration of the "your covered auto" shown in the Declarations.
The corresponding statutory provision, § 56-10-280, states:
contract or policy may be canceled within the first sixty days only under one or more of the following circumstances:
(1) A check or bank draft tendered by the insured for payment of premium is returned unpaid for insufficient funds or other reason by the insured's financial institution.
(2) The insured produces satisfactory proof from the department that he has sold or otherwise disposed of the insured vehicle or surrendered its tags and registration.
(3) The insured has secured another policy that meets the financial responsibility requirements prescribed in this chapter. S.C. Code Ann. § 56-10-280 (Supp. 1998).
Peterson contends Walker's failure to produce proof from the Highway Department that she sold or otherwise disposed of her vehicle or surrendered her tags and registrat
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