Crone, J.
Case Summary
Richard Zeller, Jr., purchased a homeowners insurance policy from AAA Insurance Company (“AAA”) that provided for reinstatement of the policy if the policyholder paid a premium installment after the cancellation date. Pursuant to the policy, the reinstatement would be void and the policy would remain cancelled if (1) the premium payment was not honored for any reason or (2) a claim under the policy arose from an event that occurred between the cancellation date and the date that AAA received the payment. Zeller failed to pay a premium installment by the cancellation date but mailed a payment that AAA later accepted. Two days after AAA accepted payment, Zeller’s garage was damaged by fire. He submitted a claim to AAA, which denied coverage on the basis that the policy was “not in force” on the day of the fire. Appellant’s App. at 82. Zeller filed a complaint against AAA alleging breach of contract and bad faith and requesting compensatory and punitive damages. After a bench trial, the trial court ruled against Zeller on the basis that there was no evidence that AAA reinstated the policy.
On appeal, Zeller argues that the trial court’s ruling is erroneous because the policy was reinstated when AAA accepted his payment. We agree. Therefore, we reverse and remand for further proceedings.
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Zeller contends that the trial court erred in concluding that the policy was not in effect on the date of the fire, noting that AAA accepted his premium payment and that his claim arose from an event that occurred after AAA received the payment. [Footnote omitted.] He further contends that the policy was reinstated when AAA accepted the payment. We agree with both contentions. The policy does not make reinstatement contingent upon the sending or receiving of a Notice of Reinstatement or any other externality; it merely specifies the two conditions under which a reinstatement may be voided, neither of which applies here. Zeller’s tender of the payment was an offer for AAA to reinstate the policy, and AAA accepted the offer by accepting the payment. “[O]nce [an offer] is accepted, a contract is formed.” Bain v. Bd. of Trs. of Starke Mem. Hosp., 550 N.E.2d 106, 110 (Ind. Ct. App. 1990).
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Finally, AAA urges us not to accept Zeller’s argument, “which is that [his] late payment automatically entitled him to reinstated coverage. If that were the case, then, … this would be an insurance-at-will state because the insured could independently reinstate his coverage without regard for payment deadlines, late payment requirements, or cancellation notices.” Appellee’s Br. at 8. We find no cause for alarm here. AAA could have protected itself by drafting more specific deadlines and requirements for reinstatement in its policy or by refusing to accept Zeller’s payment, which it had every right to do. AAA did neither of these things, however, so we must reverse the trial court’s judgment in its favor. We remand for the trial court to consider Zeller’s bad faith claim and his request for compensatory and punitive damages, which are issues that the court did not address in its judgment.
Reversed and remanded.
May, J., and Bradford, J., concur.