First National Bank in Sioux City v. Watts

LAVORATO, Justice.

A bank sued an insurer that provided collision coverage on a vehicle owned by the bank’s debtor. The bank was the lien-holder under a loss payable clause in the insurance policy. The debtor failed to pay a premium to continue insurance coverage beyond the term of the initial policy. After the policy lapsed, a loss occurred to the vehicle.

The district court concluded that the failure to pay the premium was an act or neglect of the owner within the meaning of the loss payable clause. The court also concluded that the bank was entitled to notice that the policy had been…