Legal Question in Business Law in California

Re: Payment Due Date

A recent case entitled Mackey v. Bristol West Ins. Service of California, 105 Cal.App.4th 1247 (2003) held that an insurance company must give a person notice of cancellation after the due date of the payment not received. It has been interpreted to mean the auto insurance policy may not be canceled until 10 days after the notice is mailed. The California Court of Appeal in Mackey interpreted Insurance Code section 662 which states "where cancellation is for nonpayment of premium, at least 10 days' notice of cancellation" is required. Hope this helps, although I wouldn't suggest that you tempt fate by paying late and suggest you send payment by overnight mail to guarantee its timely arrival.

Re: Payment Due Date

As Mr. Cohen's answer implies, nothing is tied to the postmark date by law, and the lock box clerks that open mail and process payments aren't deciphering postmarks. You have what amounts to a ten-day, more or less, grace period, depending on how punctual the insurance company is in dispatching its cancellation notices, which are really notices of intent to cancel, and whether they actually limit the grace period to 10 days or perhaps give you a little more leeway.

Some insurance companies will give their favored clients a little extra time.

By the way, you mentioned the 22nd but did not say whether that is your original due date or the last day of the grace period. Therefore, your question is a little ambiguous. Your agent may be correct IF the 22nd is the end of the grace period rather than your due date.

The location of the lock box in Texas probably has no effect. Personally, I have always been annoyed when mortgage, credit card, etc. processing is moved to remote locations after I initially establish an account in California, but as far as I know the right of the creditor to move processing elsewhere has never been challenged. On the negative side, we have to mail our payments sooner to assure arrival by the due date. On the positive side, it often takes more than a week for the check to be paid by my bank.