Yunker v. Farmers Automobile Management Corporation

Insureds filed declaratory judgment action for coverage for injuries sustained in auto accident while insured was a passenger in vehicle driven by another person, whose policy limits were exhausted. Court properly granted summary judgment for insurer, as policy had expired prior to date of accident, and insured failed to pay premium until nine days past the 20-day grace period. Facts support expiration of policy rather than cancellation; thus, whether cancellation notice and extended renewal provisions of policy were ambiguous is inapplicable. Court properly denied insurer's motion for sanctions, as insureds' claims set forth a coverage argument which was not unreasonable. (HOLDRIDGE and McDADE, concurring.)