Attempt to re-establish cancelled insurance coverage after fire is defeated

Kung and So Chu allowed their homeowners insurance with the Grange Insurance Company to lapse for non-payment during December of 2009. They received the proper notices of cancellation and reinstatement, although the insurer did not comply with the legal requirement that Chus' mortgage insurer be notified.  The Chus suffered a home fire on New Years Day and immediately attempted to reinstate their policy by paying the premium demanded in the cancellation notice.

The fine print of the policy and cancellation notice provided that when coverage was reinstuted after cancellation, however, it would not be effective during the period of cancellation, and the Court enforced that language against the Chus.  It also held that, although the insurer did not comply with the requirement that it notify the mortgagee of the cancellation, this violated a right held by the bank and not by the Chu family.