Kates

Does Insurance Code section 660 extend the period of an automobile policy written with a three-month term when the insured fails to pay the premium on time after a warning that coverage will expire unless the premium is paid? We conclude that it does not. Since the trial court ruled that coverage is extended in this situation, we reverse.

Factual and Procedural Summary

This action was tried on stipulated facts and we take our summary from the stipulation of the parties. The policy at issue was purchased by Gordon Dreyer in November 1984 from Workmen’s Auto Insurance Company (Workmen’s) through the Hatcher Insurance Agency. It had an original policy period of November 9, 1984, to May 9, 1985. Dreyer paid the premium to renew the policy for three months, extending the coverage period to August 9, 1985, at 12:01 a.m.

On July 10, 1985, Workmen’s sent Dreyer the document on which this case turns. Untitled, the form advised the insured: “To renew your policy, check one renewal payment option and return a copy of this notice with your payment for the amount shown for that option. If your payment is not received by 08/09/85 your policy cannot be renewed without a lapse in…