Commonwealth Consolidated Acts

INSURANCE CONTRACTS ACT 1984 - SECT 58

  (1)   In this section, renewable insurance cover means insurance cover that:

  (a)   is provided for a particular period of time; and

  (b)   is of a kind that it is usual to renew or for the renewal of which it is usual to negotiate.

  (2)   Not later than 14 days before the day on which renewable insurance cover provided under a contract of general insurance (in this section called the original contract ) expires, the insurer shall give to the insured or a person acting as agent for the insured a notice in writing informing the person to whom the notice is given of the day on which and the time at which the cover will expire and whether the insurer is prepared to negotiate to renew or extend the cover.

  (3)   Where:

  (a)   an insurer has failed to comply with subsection   (2); and

  (b)   before the original contract expired, the insured had not obtained from some other insurer insurance cover to replace that provided by the original contract;

then, by force of this section, there exists between the parties to the original contract a contract of insurance that provides insurance cover as provided by the original contract, except that the cover provided is in respect of the period that:

  (c)   commences immediately after the insurance cover provided by the original contract expires; and

  (d)   expires, unless the contract is sooner cancelled, at:

  (i)   the expiration of a period equal to the period during which insurance cover was provided by the original contract; or

  (ii)   the time when the insured obtains from the original insurer or some other insurer insurance cover to replace that provided by the original contract;

    whichever is the earlier.

  (4)   Where a contract of insurance is in force by virtue of subsection   (3):

  (a)   except in a case to which paragraph   (b) applies, no premium is payable in respect of the contract; but

  (b)   if a claim is made under the contract, there is payable by the insured to the insurer, as a premium in respect of the contract, an amount worked out in accordance with subsection   (5) or (6), as the case requires.

  (5)   If the claim is for total loss of the property insured, the premium is an amount equal to the amount (the hypothetical premium ) that, if the original contract had been renewed for the same period and on the same terms and conditions (including the same subject - matter and risk), would have been payable by the insured in respect of the renewal.

  (6)   If the claim is not for total loss of the property insured, the premium is an amount worked out in accordance with the formula:

where:

"period until claim" means the number of days in the period that began on the day on which the contract came into force and ended on the day on which the claim was made.

"hypothetical premium" has the meaning given in subsection   (5).

"period of original contract" means the number of days in the period of the original contract.