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

UPDATED: Oct 2, 2022

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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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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