Notice For Cancellation

Weatherford insurance attorneys need to know the required notices to be sent by an insurance company when canceling a policy.
When an insurance company decides to cancel the liability coverage, it must deliver or mail to the first-named insured under the policy, at the address shown on the policy, notice of cancellation not less than the 10th day before the date on which the cancellation takes effect. This rule is found in the Texas Insurance Code, Section 551.053. The notice shall state the reason for the cancellation. The statement must fully explain any decision that adversely affects the policyholder by denying him or her coverage or continued coverage and must:
(1) state the precise incident, circumstance, or risk factor applicable to the policyholder that violate the guidelines;
(2) state the source of information the insurance company relied on regarding the incident, circumstance, or risk factor; and (3) specify other information deemed relevant by the Commissioner of Insurance.

As such, written notice of cancellation need not be given to any additional insured, unless the policy so requires. This would normally be in cases where there is a note still being paid on the insured property such as a car or house.

As described below, the Insurance Code limits the insurance company’s right to cancel coverage under the following types of property and casualty policies:
(1) a personal automobile policy, other than a policy written through the Texas Automobile Insurance Plan;
(2) a homeowners or farm or ranch owner’s policy;
(3) a standard fire policy insuring a one-family dwelling, a duplex, or the contents of a one-family dwelling, a duplex, or an apartment; and (4) a policy providing property and casualty coverage to a governmental unit, other than a fidelity, surety, or government bond.

For purposes of the statutory limitations on cancellation of certain property and casualty insurance, “insurer” refers to any licensed insurer writing property and casualty insurance in Texas, including:
(1) a county mutual insurance company;
(2) a Lloyd’s plan company;
(3) a reciprocal or inter-insurance exchange; and (4) a farm mutual company.

Here is a statute to remember. — Texas Insurance Code, Section 551.111. It says an attempted cancellation in violation of the statutory requirements has no effect. The policy remains in force and the insurer remains responsible for losses covered by the policy following an impermissible or improper cancellation.

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