Cancellation
Definition
The termination of an insurance policy before its scheduled expiration date. Cancellation can be initiated by either the policyholder or the insurer. If the insurer cancels, they must follow state-specific notice requirements and can typically only cancel for specific reasons such as non-payment of premium, material misrepresentation, or a substantial increase in risk.
When This Matters
You fail to pay your premium by the grace period deadline. The insurer sends a cancellation notice, and your coverage terminates 10 days later per state law.
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