April 30, 2021

Antonopoulos v. Mid-Century Insurance Co., A160360 (April 27, 2021)

Plaintiffs submitted an insurance claim for the loss of their home in a wildfire. The insurer denied coverage because the policy had lapsed for nonpayment of premium. Plaintiffs immediately paid the premium and the insurer reinstated the policy. The insurer maintained there was still no coverage for the claim, however, because the loss occurred while the policy was lapsed and under the “loss-in-progress” rule (Ins. Code, §§ 22, 250), there is no coverage for losses known before a policy issues. The parties filed cross-motions for summary judgment; the trial court granted plaintiffs’ motion and denied the insurer’s.

The Court of Appeal affirmed denial of the insurer’s motion but reversed the grant of plaintiff’s motion. The loss-in-progress rule ordinarily precludes coverage for losses known prior to the inception of an insurance policy. The court held, however, that where a policy is reinstated after a lapse (e.g., for nonpayment of premium), whether there is coverage for a loss that occurred during the lapse period depends on the insurer’s intent to cover the loss when it reinstates the policy. As a result, the insurer was not entitled to judgment as a matter of law based on the loss-in-progress rule. However, factual questions concerning the insurer’s intent to waive plaintiffs’ forfeiture likewise precluded summary judgment for the plaintiffs.