Canceling personal policies—the rules to follow

December 29, 2021

When insurers choose to cancel—or not to renew—a personal insurance policy, they need to ensure that they comply with the laws of the state in which they do business. Agents need to know these requirements to ensure they and their clients receive the notice of cancellations and nonrenewals within the legally mandated time frame and through the legally mandated means of notification.

What do agents need to know?

Time frames. There are specific time frames in which an insurer must notify the insured of a cancellation or nonrenewal, and these time frames vary depending on the state and why the policy is being canceled or nonrenewed.

Means of notification. Many state laws differ in how insurers must notify insureds of cancellations and nonrenewals, too.

Flood insurance. Agents should be aware of federal requirements pertaining to the cancellation or nonrenewal of National Flood Insurance Program flood policies. And, if a homeowner has purchased a private flood policy, the requirements may differ.

Other limitations and requirements. If an insurer chooses to cancel a personal policy midterm, they only may do this under limited circumstances. Agents should know these requirements because they have limited time to navigate these situations.

You can learn more

Are you looking for a quick refresh on these personal-lines cancellation and nonrenewal requirements? Attend Personal Lines Cancellation Refresh, taught by PIA Northeast Government Affairs Counsel Clare Irvine, Esq., on Thursday, Jan. 13, 2022, from 10-11 a.m.

This online course is an opportunity for all PIA members to learn about personal-lines cancellations. It has been approved for continuing-education credits in New York, and has been submitted for approval in Connecticut and New Jersey.

For more information, or to register for the class, log on to the PIA Northeast education schedule.

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