§ 20-1632 — Cancellation, nonrenewal and reduction of limits for reasons other than nonpayment of premium; notices to insured; refund of unearned premium

Arizona § 20-1632

• Jurisdiction: Arizona
• Title 20: Arizona Revised Statutes
• Ch. 6: PARTICULAR TYPES OF INSURANCE
• Art. 11: Cancellation or Nonrenewal of Motor Vehicle Insurance

Text

A. A notice by the insurer to the policyholder of cancellation or reduction in the limits of liability or coverage for reasons other than nonpayment of premium shall be sent to the named insured at least ten days before the effective date of the cancellation or reduction in limits of liability or coverage. Notice of nonrenewal for reasons other than nonpayment of premium shall be sent at least forty-five days before the effective date of the nonrenewal. A notice under this subsection shall include or be accompanied by all of the following:

1. A statement in writing of the specific facts that constitute the reasons, consistent with this article, for such action by the insurer and a notice indicating the named insured's right to complain to the director of the insurer's action within ten days after receipt of the notice by the insured.

2. Notice of the insured's possible eligibility for insurance through the automobile assigned risk plan, and the notice shall state that all information included in the notice is given pursuant to this article.

3. Except as provided in paragraph 4 of this subsection, a refund of unearned premium. For the purposes of this paragraph, the insurer shall either send the notice and refund of unearned premium together at least ten days before the effective date or send the notice before the refund of unearned premium if both the notice and the refund of unearned premium are sent separately to the insured at least ten days before the effective date. As an alternative to sending the refund by mail, an insurer may refund the unearned premium by any electronic means previously established with the insured to make and receive premium payments for the policy.

4. In the case of a notice of cancellation or nonrenewal of a policyholder whose premium payment is collected and remitted on the insurer's behalf by the insurer's affiliate, the insurer shall refund any unearned premium to the policyholder within ten days after the policy cancellation or nonrenewal. For the purposes of this paragraph, "affiliate" has the same meaning prescribed in section 20-481.

B. Failure of the insurer to comply with subsection A of this section shall invalidate any cancellation, nonrenewal or reduction in limits of liability or coverage.

C. If a premium has been financed, a refund of unearned premium shall be returned as provided in section 6-1416.