Section 4.85 Cancellation

• Library: Insurance Practice 2015

Cancellation by the insurance company is governed not only by the terms of the policy but also by state statute and regulation. Sections 375.001–375.011, RSMo 2000, apply to the cancellation or nonrenewal of contracts of insurance providing fire and extended coverage on owner-occupied habitational property not exceeding two families. Insurance contracts issued under the Fair Access to Insurance Requirements (FAIR) Plan (§4.20, supra) or an assigned risk plan, policies insuring property not used predominately for habitational purposes, and policies insuring mobile homes are not within the purview of these statutory provisions. See Kelley v. Shelter Mut. Ins. Co., 748 S.W.2d 54 (Mo. App. S.D. 1988). A Missouri Department of Insurance regulation, 20 C.S.R. § 500-1.100, modifies the cancellation provisions of a standard fire insurance policy. See §4.102 below, discussing the provisions of this regulation.

Under the terms of the policy and § 375.003, RSMo 2000, notice of cancellation of a policy is not effective unless mailed or delivered by the insurer to the named insured at least 30 days before the effective date of cancellation. When cancellation is for nonpayment of premium, however, only 10 days’ notice of cancellation is required.

According to the terms of the policy and § 375.002, RSMo 2000, if a policy has been in effect less than 60 days and is not a renewal, the insurer, for any reason, may cancel it. If the policy has been in effect for more than 60 days, however, cancellation is effective only if it is based on certain specified reasons. The policy and § 375.002 both provide that, if the policy has been in effect for more than 60 days, the company may cancel if there has...