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INSURANCE COVERAGE: Appellate Court holds that insureds’ policy was validly canceled for nonpayment; trial court erred in finding otherwise

The defendants failed to make their June monthly installment payment of $62.64 by tenth of the month, in accordance with their insurance policy requirements.  The plaintiff insurer sent a notice stating that the policy would be canceled for nonpayment unless a payment of $124.48 was made before July 4.  The defendants submitted a payment of $62.00 on June 26 and the plaintiff terminated coverage for nonpayment on July 4 and notified the defendants.

Defendant was in a motor vehicle accident on July 18 and plaintiff sought a declaratory judgment that it owed no duty to defend or indemnify defendants.  Plaintiff submitted evidence of its billing and cancelation practices at trial and the trial court held for the defendants, finding that the defendants had timely paid the only amount due prior to July 4 ($62.64) under the policy terms.  The $62.00 that the defendants paid constituted substantial compliance so as to preclude cancelation for nonpayment.

The Appellate Court reversed, holding that the trial court committed clear error and that there was no evidence to substantiate its finding that $62.64 was the amount actually due prior to July 4 to cure the default.  All of the evidence presented indicated that the amount due by July 4 was $124.48.  The Court also noted that whether the amount due was $62.64 or $124.48, it was undisputed that the insureds failed to tender the payment, and the doctrine of substantial compliance did not apply in this context.

21st Century North American Insurance Co. v. Perez, 177 Conn. App. 802 (2017)