Does Insurer always send cancellation notice to loss payee?

Hi, I live in New York State.

I re-initiated a full coverage auto policy with Geico after having kept my car in storage for 6 months, while being overseas. My Credit Union was listed on the policy as the lienholder; a 'Loss Payable Clause'was attached to my policy and Geico informed my CU of coverage being in place.

Approximately 10 days later, Geico contacted me and informed that an underwriting review had determined that I didn't qualify to be written under the preferred rating company (Geico General Insurance Company). The underwriter provided me with a quote for my same coverages in the standard rating company (Geico Indemnity Company). The 6 month premium went from $803 to $3,760. Bewildered, and completely unable to afford that cost, I went through several coverage options with the underwriter and finally determined that I could only afford the state required liability at $1,270/6 mos.

A liabilty policy was issued with Geico Indemnity, and the Geico General policy was canceled. Though the Indemnity policy has the same policy number as the original General policy, it has a different term date: effective 1/26, as opposed to 1/12. Further, when I look on the Geico website under policy documents, one folder representing each of the term dates mentioned above. Finally, the Indemnity policy effective on 1/26 is listed as 'New Business.'

A few days later, an insurance agent friend convinced me that I was putting myself at great financial risk considering my outstanding auto loan. Together we logged on to the Geico website and he was able to tweak coverages so that comprehensive coverage could be added for $180. Living in NYC and I don't drive very much anymore, we decided my risk of an accident was lower and left off the collision coverage. We submitted the changes online, and Geico sent me a confirmation email of the coverage being added.

My car was stolen about 10 days later. NO, I am not joking.

I filed a claim and Geico is currently denying it. Their denial of the claim is based on a complicated issue that actually doesnt relate to my question. So, I won't get into now, but can explain later.

My question actually goes back to the original full coverage policy initiated on 1/12, and the attached 'loss payable clause.'

New York State has no statutes or regulations reagarding the obligations of an Insurer to notify a lienholder or loss payee of coverage changes. The Insurance Department does have a published opinion on their website stating that while there are no state regulations, any policy provisions regarding notification must be abided by.

In regards to notification of coverage changes, the loss payable clause states:

"We will mail notice to the Lienholder at least 10 days before we cancel his interest in the policy."


Here is my question:

In the above cirumstance, did Geico have a responsibility to send notification to the lienholder of the cancellation of the 1/12 Geico General Policy, according to this statement in the 'Loss Payable Clause.'

Its unclear to me due to the following:

Q1) What does 'cancel' mean?
-- Does 'cancel' simply mean any elimination/removal of coverage impacting the lienholder?
-- Would 'we cancel' specifically indicate removals/revocations of coverages initiated by Geico, or would 'we cancel' also indicate a request from me the Insured to remove coverages impacting the lienholder?


I, the insured, did not request that Geico remove coverages from or cancel the 1/12 General policy. In actuality, all I did was purchase a new policy from Geico Indemnity that provided liability coverage, after Geico informed me that they had disqualified me from the Geico General company and would not continue to provide coverage under that policy.

Q2) Would Geico or the Insured be considered to have canceled the lienholder's coverage in this situation?

Thanks very much for your thoughts on the matter.