In what scenario can an insurer cancel a policy that has been in effect for more than 60 days?

An insurer can cancel a policy that has been in effect for more than 60 days only for specific allowable reasons as outlined in California insurance regulations. These regulations are in place to protect policyholders and ensure fairness in the insurance market.

When a policy is active for more than 60 days, the policyholder has not only invested into the policy but also has rights that come with it. The law stipulates that cancellations after this period can only occur for specific reasons, such as non-payment of premiums, material misrepresentation, or changes in risk that would make the coverage inappropriate or unsafe. It ensures that insurers cannot arbitrarily decide to cancel a policy without just cause, which helps to foster trust and stability in the insurance marketplace.

In scenarios where policies can be canceled due to non-payment (but only if it has been specified that the insured needs to be notified), or if fraudulent activity is identified, the insurer must follow the legal procedures and provide adequate notice. Hence, the requirement for specific allowable reasons ensures that both the insurer and the insured uphold a fair agreement and that the insurer cannot act capriciously.