In a case of first impression, the Connecticut Appellate Court recently held that when an insurance policy has been canceled for premium nonpayment, and the insured seeks to reinstate that policy, the insurer may reinstate coverage effective only for future losses. In Brown v. State Farm Fire & Casualty, 150 Conn. App. 405, cert. denied, 315 Conn. 901 (2014), the court held that the insurer’s acceptance of a late premium payment does not waive its right to deny coverage for a loss suffered between the time of the lapse and the reinstatement.
Looking to the viewpoint followed in the majority of jurisdictions and applying the concept of fortuity, the court barred the insured from recovering on a residential fire loss that occurred between the time of lapse and reinstatement. The court’s decision is significant because, consistent with public policy underpinning all insurance, it protects insurers from covering known losses and, in effect, “buying a claim.”
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