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Thompson v. Country Mutual Insurance Co.

March 06, 2001

VINCENT G. THOMPSON, PLAINTIFF-APPELLEE,
v.
COUNTRY MUTUAL INSURANCE COMPANY, DEFENDANT-APPELLANT.



Appeal from Circuit Court of McLean County No. 96MR18 Honorable John P. Freese, Judge Presiding.

The opinion of the court was delivered by: Justice Knecht

Defendant, Country Mutual Insurance Company, appeals from the granting of a summary judgment motion in favor of plaintiff, Vincent G. Thompson, and the denial of its own motion for summary judgment in a declaratory judgment proceeding. Defendant argues the trial court erred in finding its automobile policy applied to plaintiff's replacement vehicle when an accident involving the vehicle occurred after the end of the original policy term but during the extension period provided by defendant in its notice of cancellation. We affirm.

The facts are undisputed. On April 22, 1994, defendant issued an automobile insurance policy to Richard Scott Claypool insuring Claypool's 1991 Chevrolet. The term of the policy was for a period of six months and included coverage for bodily injury resulting from an accident involving Claypool's vehicle. On September 3, 1994, Claypool purchased a 1977 Mercury Montego as a replacement vehicle for his 1991 Chevrolet.

In regard to newly acquired vehicles, defendant's insurance policy provides:

"6. Newly Acquired Vehicle. If you have disposed of the vehicle described on the declarations page and have acquired another in its place, this policy transfers to the newly acquired vehicle.

This policy also applies to an additional vehicle you have acquired if we insure all the motor vehicles you own.

You must ask us to insure the newly or additionally acquired vehicle during the policy period or within 30 days after you acquire it, whichever is longer. You must also pay any additional premium required."

On October 31, 1994, defendant mailed to Claypool at his last known address a cancellation notice, which stated:

"COVERAGE TERMINATION DATE: Nov 12, 1994

According to our records the total billed installment has not been received. Because of that, insurance coverage will terminate on the date and time shown above.

If you have not purchased another policy and payment of the required amount due is received by the coverage termination date, and approved by the company at its Regional Office in Bloomington, Illinois, you will receive notification providing you with un-interrupted coverage."

On November 3, 1994, Claypool was involved in an automobile accident with plaintiff while operating the 1977 Mercury he had purchased on September 3. Plaintiff claims to have sustained bodily injury from that accident. Claypool had not provided defendant with notice of the newly acquired vehicle. Defendant denied coverage to Claypool for the November 3 accident, asserting coverage had expired on October 22 at the end of the initial six-month policy term without notice of the newly acquired vehicle.

On February 13, 1996, plaintiff filed a declaratory judgment action in the circuit court of McLean County, contending the cancellation notice from defendant extended the policy period from October 22 to November 12, 1994. As the accident occurred on November 3, plaintiff contended it was within the policy period in which Claypool had to notify defendant of his newly acquired vehicle and, therefore, insurance coverage had automatically transferred to the newly acquired vehicle.

Defendant filed an affirmative defense, claiming Claypool had failed to notify it within 30 days of acquisition of the newly acquired vehicle or within the policy period that had expired on October 22. Thus, there was no ...


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