Texas Property and Casualty License Practice Exam

What notice is required for a non-renewal of a policy from the insurer?

1. 30-day advance written notice to the insured

2. Immediate notification via phone

3. A verbal agreement to cancel

4. No notice is necessary

The correct answer is: 30-day advance written notice to the insured

The requirement for a 30-day advance written notice to the insured for non-renewal of a policy is based on the principle of ensuring that policyholders are adequately informed about changes in their insurance coverage. This notice period provides the insured sufficient time to seek alternative coverage if they wish. Insurance laws are designed to protect consumers by ensuring transparency and communication from insurers. By requiring a written notice, it creates a formal record of the insurer's intent, which is important for both parties. This minimizes the likelihood of misunderstandings regarding coverage and allows the insured to plan accordingly for their insurance needs without the risk of a sudden lapse in coverage. In contrast, immediate notification via phone lacks the formality and safety of a written record, while a verbal agreement to cancel does not meet legal standards of notification. Finally, stating that no notice is necessary would undermine the consumer protection measures established in insurance regulation. Thus, the requirement of a 30-day advance written notice aligns perfectly with the regulatory framework designed to protect insured individuals.