Can an insurance company refuse to cover a stolen car 3 days prior to a cancellation notice?

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Can an insurance company refuse to cover a stolen car 3 days prior to a cancellation notice?

My brother lives in Missouri, on 9/22 he was car jacked and had all of his money
and possessions stolen. He reported it to the police and as soon as he could get
home to the insurance company. He had a cancellation notice as of 9/25. The
insurance ompany is now refusing to cover him because of the nonpayment. Can
they do that seeing as how everything he had and his car was stolen 3 days before
the cancellation notice was effective?

Asked on September 27, 2019 under Insurance Law, Hawaii

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

If as you indicate the policy had not yet been cancelled as of the date of the theft, then by definition it was still in effect and the insurer would have to pay IF this was a legitimate claim. The insurer may also, however, be refusing to pay because they don't think it is legitimate: if someone failed to pay to maintain their policy (suggesting monetary problems) then their is stolen right before they lose coverage so they can get a payout from the insurer, that is suspicious; it suggests that the theft was not really a theft but that your brother arranged for the carjacking (e.g. colluded with the carjacker or even hired him) so as to put in the claim.
If your brother was legitimately the victim of crime, then he can  sue the insurer for "breach of contract," or not honoring their contractual obligations (an insurance policy is a contract) to pay. In the lawsuit, he'd provide his evidence of an actual crime; the insurer can try to defend by trying to prove it was not.


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