Full Definition
A cancellation clause defines how and when an insurance policy can be terminated before its natural expiration date. Insurers typically must provide 10-60 days written notice (depending on state and reason for cancellation). Common insurer cancellation reasons include non-payment of premium, material misrepresentation, and substantial change in risk. Most states restrict mid-term cancellation after 60 days to non-payment or fraud. The insured can cancel at any time with short-tail premium return. Certificates of insurance often include '30 days notice of cancellation' language, but this is only meaningful if the actual policy includes a cancellation notification endorsement for certificate holders.
Related Terms
Explore More