HomeMy WebLinkAbout2093 The lsgal issue upo~ which this case must be decided is whethes +
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or not the express provision of the endorsement to the effect that ~
the extended coveraqe offered shall be null and void upon the non- ~
payment of premium, is valid and forceable.
Although there appears to be no Florida Appellate decisions on
this point dir~ctly dealing with Professional Liability Insurance,
the rule has been recognized in Florida that an insurance policy may ~
validly stipulate that nonpayment of premium when due will effect a
forfeituYe. 18 FLA Jtir. -Insurance, Section 548. See also American
Automobile Insurance Association v. Folsom, 161 So. 434 (1935)
(Collision insurance); Borin v. Kentuck Home Mutual Life Insurance
Company, 7 So. 2d, 587 (1942) (Life Insurance); Currv v. Security
Life and Trust Companv, 187 So. 2d 906 (1966) (Mortgage life insurance);
and Couch v. Kentuckv General Life Insurance Company,.216 So. 2d,
72 (1968) (Group health and accident insurance). This also appears
to be the general rule in the United States. Professor Couch in his
treatise on insurance states:
"It is generally agreed that conditions in policies as
I` to forfeiture for nonpayment of premiums, at or within a
specified time, are valid and enforceable in the absence of
statutory provisions to the contrary, or except as limited
by statute. And the time fixed for payment is bind ing, in
the absence of fraud or mistake, or ui~less waived, or unless
the insurer is estopped." Couch on Insurance 2d §32:57
"Where the policy makes clear and unamhiguous provision
for a forfeiture upon nonpayment of premiums, the court must
enforce such forfeiture, for neither-the principle of strict
aonstruction against the insurer, nor the rule for the avoid-
ance of forfeitures, will warrant the court's~rewriting the
contract of the parties where they have expressly provided
for a forfeiture. Similarly, the courts are nQt to take clear
provisions calling for forfeiture ar~:: give them an unreason-
able interpretation, thus depriving insurers of substantial
rights inuring to them under the law and their contracts. If
an unqualified provision for forfeiture upon default is clear
and unambiguous, the court has no power to vary the stipulation,
although payment may have been prevented by poverty, illness,
mental impairment, or accident." Couch on Insurance 2d §32:58
"If a policy of insurance provides that the premium shall
be paid on or before a stipulated day or the policy shall be-
come forfeited and void or the insurer shall be re~eased from
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