If you are like me, bills often pile up before you find the time (or money) to get them paid. Some bills, however, take precedence. Knowing how eager insurance companies are to get out of paying policy benefits, if they have any way to avoid doing so, I try to make certain my premiums are paid up should I be so unfortunate as to be involved in an accident. I have learned that you never know when fate will provide you with an unpleasant surprise. My mother always told me to wear clean underwear in case I was involved in an accident, and she was right. On June 1, l977 I paid a visit to the medical examiner so that my Commercial Certificate, which expired the day before, could be renewed. After leaving the doctor's office with a brand new Class I medical, I went to the airport to fly a banner towing flight. Fortunately I had the valid medical since I was involved in a crash. My license was safe, and the insurance company could find no loophole to avoid coverage.
   Thus, it is important to see that insurance premiums are timely paid. This issue is made clear in a recent California Appellate Court case entitled Escobedo vs. Estate of Snider. Although the trial court determined that there was no coverage for the accident since a cancellation notice had been sent to the insureds, the appellate court reversed, and found the insurance company had not complied with certain statutory dictates necessary for valid cancellation.
   Mr. Snider owned a Piper aircraft which he based at a Ventura
   County run airport. As is required by many governmentally owned or managed airports, Mr. Snider had to obtain at least $100,000 bodily injury overage, and see that an endorsement was mailed to the County of Ventura. The policy stated that it was effective "until canceled". Mr. Snider renewed the policy in 1991, but neglected to pay the annual premium in 1992. On September 12, 1992 National Aviation Underwriters sent a letter to Mr. Snider warning that the policy would be canceled if payment was not received by October 12, 1992. On October 13, 1992 it mailed a letter stating that the policy was canceled as of October 12, 1992. On October 30, 1992, Snider and his passenger, Mr. Escobedo, were killed when the aircraft crashed.
   The insurance company stipulated that it did not send a notice of cancellation to either the County of Ventura, or the California Department of Aeronautics. California's Uniform Aircraft Financial Responsibility Act (UAFRA) requires that no insurance policy shall be canceled "unless 30 days' prior notice is given to the department by either the insured or the insurance company."
   The Court of Appeal agreed that the UAFRA applied, and that coverage was in effect at the time of the accident. National asserted that the policy "expired" before the accident, and thus the provisions of UAFRA did not apply. However, the policy's own language stated: "If this policy conflicts with the laws of the state in which it is issued, it is amended to conform to the laws of that state." Thus, California's law had to apply.
   National further argued that under California's Insurance Code, an automobile policy expires as a matter of law whenever the insured fails to pay a renewal premium. Obviously the court rejected that argument since that law applied specifically to automobile policies. One specific section of the Insurance Code states: "No policy of insurance issued or delivered in this state covering any loss, expense or liability arising out of the ownership, maintenance, or use of an aircraft shall . . . deny coverage which the insured is obligated to provide according to law."
   National then argued that UAFRA was not intended to protect passengers, but rather, "ground victims otherwise unable to foresee or guard against risk of loss or injury due to small aircraft in flight . . ." However, the policy in this case did provide coverage for passengers, and national was obligated to follow proper procedures complying with cancellation.
   Insurance companies often will argue there is no coverage when an insured does not precisely comply with the conditions of the policy. If the pilot does not have a valid medical certificate, regardless of whether or not his medical condition had a causal relationship to an accident or incident, the insurer would deny coverage. If an aircraft does not have a current annual, coverage will be denied. Therefore, it is welcome to see a ruling that holds insurance companies too must follow the dictates of the law, and their own policies, before depriving benefits to innocent victims of plane crashes.
   Should you determine that your coverage has been "canceled" and an incident for which policy benefits are needed does occur, don't rely on your insurance agent for advice. Check the local laws to make certain the insurance company has done everything it was required to do for cancellation to be effective.