Cancellation & Nonrenewal of a Policy
Within first 59 days. Minnesota law prohibits any person being denied an insurance policy on the basis of employment status, status as a tenant, or for not previously having an auto insurance policy (unless the person was legally required to have one).
Except
for these reasons, an insurance company can cancel an insurance policy for any
reason within 59 days of issuing it. Cancellation or reduction of coverage
during the term of the policy. After the first 59 days, an insurance company
cannot cancel a policy during the policy period except for the reasons summarized
below; a complete itemization of causes for cancellation are contained in
Minnesota Statutes Chapter 65B.15. Minnesota law also requires that the
policyholder be notified of the cancellation and reasons for it.
• Nonpayment
of premium.
•
The policy was obtained through a misrepresentation.
•
If the insured knowingly made a false or fraudulent claim and aided another in
presenting a false claim.
•
Failure by the insured to disclose any accidents or traffic violations within
the preceding 36 months, or to disclose any requested information on the
written application that would affect acceptance or the risk rating.
•
Failure to disclose that the insured is the subject of a law suit or refused to
cooperate in a claim investigation.
•
Failure to identify another person in the household who would be insured under
the same policy.
• Has
health problems such as epilepsy or heart attacks and does not provide a
physician’s written statement that despite these problems the insured can
safely operate an automobile.
•
The insured automobile is so defective that its operation might endanger public
safety or it is used for particular purposes that increase risk.
Nonrenewal
of a policy.
At
the end of the policy period, the insurance company might choose not to renew
the policy for any of the reasons listed above. In addition, there are other
reasons a company may choose not to renew. These include failure of the insured
to provide necessary underwriting information requested by the insurance
company. The request must be in writing, be sent twice, and state why the
information is needed; the second request must inform the policyholder that the
policy will not be renewed
unless the information is provided.
Another
reason for nonrenewal is the termination of an insurance company’s contract
with an agent. The company can drop the policies carried by that agent, except
in the case of drivers 65 or older. These drivers must be informed that they
have the right to continue their policy.
The
collection by the insured of a certain number of points is another reason for
nonrenewal. Points are assigned based on auto violations or accidents, and a
total of two points acquired by one insured on a single vehicle is sufficient
to warrant nonrenewal. See Appendix I for a complete description of the point
system as prescribed by Minnesota Rules.