| Once
a policy is issued, the insurance company except for reasons specifically
stated in the policy can not cancel it, and state laws usually limit what
a company can include in the "cancellation" provisions of its policies.
Typically, policies will be subject to cancellation only for failure to make required
premium payments or for some type of serious misrepresentation or fraud by the
policyholder. Most
property and liability policies are issued for a stated policy "term",
such as six months or one year. The limitation on cancellation mentioned above
applies only during the policy term. Insurance companies usually
can decide to discontinue or "non-renew" these policies at the end of
the term for any reason except a reason that would be prohibited by law (also,
in a few states an insurance company may not refuse to renew certain types
of personal insurance). In most states, an insurance company must
give the policyholder a written notice at least 30 days prior to the end of the
policy term if it intends to non-renew a personal auto or homeowner's policy. |
