Effective 28 Aug 1985
376.434. Carrier liable for claims incurred during grace period, when — exceptions. — 1. If a policy or contract subject to sections 376.431 to 376.442 provides for automatic discontinuance of the policy or contract after a premium or subscription charge has remained unpaid through the grace period allowed for such payment, the carrier shall be liable for valid claims for covered losses incurred prior to the end of the grace period. However, in no case shall a carrier be held liable for claims incurred during a grace period unless:
(1) Appropriate dues or premiums are received by the carrier during such grace period; or
(2) Such liability is specifically stated in the contract.
2. If the actions of the carrier after the end of the grace period indicate that it considers the policy or contract as continuing in force beyond the end of the grace period, such as by continuing to recognize claims subsequently incurred, the carrier shall be liable for valid claims for losses beginning prior to the effective date of written notice of discontinuance to the policyholder or other entity responsible for making payments or submitting subscription charges to the carrier. The effective date of discontinuance shall not be prior to midnight at the end of the third scheduled work day after the date upon which the notice is delivered.
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(L. 1985 H.B. 623)
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