Question: In 1985 State Farm Mutual Insurance issued Casto an automobile
In 1985, State Farm Mutual Insurance issued Casto an automobile insurance policy on her Jaguar. Casto also insured a second car, a Porsche, with State Farm. Sometime in September or early October 1987, Casto received two renewal notices for her policy on the Jaguar, indicating that the next premium was due on October 10, 1987. State Farm sent a notice of cancellation on October 15, indicating that the policy would be canceled on October 29. Casto denied having received this notice. On October 20, Casto placed two checks, one for the Jaguar and one for the Porsche, in two preaddressed envelopes that had been supplied by State Farm. She gave these envelopes to Donald Dick, who mailed them on the same day. The envelope containing the Porsche payment was timely delivered to State Farm, but State Farm never received the Jaguar payment, and that policy was canceled. Casto was involved in an accident on November 20 while driving the Jaguar. When she made a claim with State Farm, she learned that the policy had been canceled. After the accident, the envelope containing the Jaguar payment was returned to her stamped "Returned for postage." The envelope did not bear any postage when returned to Casto. Casto brought a declaratory judgment action seeking a declaration that her insurance policy was in effect as of the date of the accident.
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