Personal Automobile Resource Articles

If a policy has been in effect less than sixty (60) days and is not a renewal it may be cancelled by giving not less than ten (10) days notice. TCA 56-7-1302 lists several reasons for which a policy may be canceled if it has been effective over sixty (60) days or has been renewed. Mailing of notice shall be sufficient proof of notice.

A company may non-renew a private passenger automobile policy by giving at least thirty (30) days notice. Again proof of mailing of notice shall be sufficient proof of notice. If the reason for non-renewable is not given in the notice the notice must advise the insured that upon written request received not later than fifteen (15) days after the effective date of non-renewable the insurer will mail the insured a written statement specifying a reason.

The code section is shown below.

56-7-1301. Definitions - Application of part.

(a)  As used in this part:

(1) "Nonpayment of premium" means failure of the named insured to discharge when due any obligations in connection with the payment of premiums on a policy of automobile liability insurance or any installment of such premium, whether the premium is payable directly to the insurer or its agent or indirectly under any premium finance plan or extension of credit; and

(2) "Private passenger automobile liability insurance policy" means a policy delivered or issued for delivery in this state, insuring a natural person as named insured, or one (1) or more related individuals resident of the same household, and under which the insured vehicles therein designated are of the following types only:

(A) A motor vehicle of the private passenger or station wagon type that is not used as a public or livery conveyance for passengers, nor rented to others; or

(B) Any other four (4) wheel motor vehicle with a load capacity of one thousand five hundred pounds (1,500 lbs.) or less which is not used in the occupation, profession or business of the insured, other than driving to and from the insured's place of employment or used in the occupation of farming.

(b)  This part does not apply to:

(1) Policies of automobile liability insurance issued under an automobile assigned risk plan;

(2) Any policy insuring more than four (4) automobiles;

(3) Any policy covering garage, automobile sales agency, repair shop, service station or public parking place operation hazards; or

(4) Any policy of insurance issued principally to cover personal or premises liability of an insured even though such insurance may also provide some incidental coverage for liability arising out of the ownership, maintenance or use of a motor vehicle on the premises of such insured or on the ways immediately adjoining such premises.

(c)  This part applies only to that portion of an automobile liability policy insuring against bodily injury and property damage liability and to the provisions therein, if any, relating to medical payments and/or uninsured motorist coverage.

[Acts 1968, ch. 582, § 2; 1977, ch. 359, § 2; T.C.A., § 56-1155; Acts 1981, ch. 291, § 1.]

56-7-1302. Cancellation of automobile insurance policies - Grounds.

(a)  Every private passenger automobile liability insurance policy shall hereafter be subject to the provisions of this part.

(b)  Unless the policy has been in effect less than sixty (60) days at the time notice of cancellation is mailed, and it is not a renewal policy, the company shall not exercise its right to cancel the insurance afforded in the policy unless such cancellation is based on one (1) or more of the following reasons:

(1) Nonpayment of premium;

(2) (A) The policy was obtained through a material misrepresentation;

(B) The named insured failed to disclose fully the insured's motor vehicle accidents and moving traffic violations for the preceding thirty-six (36) months if called for in the application; or

(C) The named insured failed to disclose in the written application or in response to inquiry by the insured's broker or by the insurer or its agent information necessary for the acceptance or proper rating of the risk;

(3) (A) Any insured violated any of the terms or conditions of the policy;

(B) Any insured made a false or fraudulent claim or knowingly aided or abetted another in the presentation of such a claim; or

(C) If, after the effective date of the insurance, the policy is extended, with or without charge, to provide coverage for the operation of an automobile by a person or persons not listed on the original application, or a supplement thereto, the company shall be allowed sixty (60) days, after written request to the company for insurance on such driver or drivers, to accept or reject the additional risk and, if the additional risk is not acceptable to the company, the policy may be cancelled; provided, that notice shall be mailed within sixty (60) days from the date of such request;

(4) The named insured or any other operator, either resident in the same household, or who customarily operates an automobile insured under the policy:

(A) Has had a driver's license or motor vehicle registration suspended or revoked within the thirty-six (36) months prior to notice of cancellation;

(B) Is or becomes subject to epilepsy or heart attacks, and cannot produce a certificate from a physician testifying to such person's unqualified ability to operate a motor vehicle; or

(C) Is or has been convicted of or forfeits bail, during the thirty-six (36) months immediately preceding the effective date of the policy or during the policy period, for:

i) Any felony;

(ii) Criminal negligence resulting in death, homicide or assault, arising out of the operation of a motor vehicle;

(iii) Operating a motor vehicle while in an intoxicated condition or while under the influence of drugs;

(iv) Leaving the scene of an accident without stopping to report;

(v) Theft of a motor vehicle;

(vi) Making false statements in an application for a driver's license; or

(vii) A third violation, committed within a period of thirty-six (36) months, of:

(a) Any ordinance, law or regulation limiting the speed of motor vehicles; or

(b) Any of the provisions in the motor vehicle laws of any state, the violation of which constitutes a misdemeanor, whether or not the violations were repetitions of the same offense or were different offenses; or

(5) The insured automobile is:

(A) Altered so as to increase the risk substantially;

(B) Used as an authorized emergency vehicle; or

(C) Subject to an inspection law and has not been inspected or, if inspected, has failed to qualify.

(c)  No automobile liability insurance policy may be cancelled solely because the driver was involved in a collision not adjudicated the driver's fault.

[Acts 1968, ch. 582, § 1; T.C.A., § 56-1154; Acts 1993, ch. 380, § 1.]

56-7-1303. Notice of cancellation.

(a) (1)  No notice of cancellation of a policy shall be effective unless mailed or delivered by the insurer, its authorized agent or employee, to the named insured as shown in the policy declarations at the address shown in such declarations, stating when not less than twenty (20) days thereafter such cancellation shall be effective; provided, that:

(A) If the cancellation is due to nonpayment as hereinbefore defined; or

(B) If the policy has been in effect less than sixty (60) days and is not a renewal policy;

the policy may be cancelled by the company by mailing to such insured written notice stating when not less than ten (10) days thereafter such cancellation shall be effective.

(2) The mailing of such notice shall be sufficient proof of notice.

(3) The effective date and hour of cancellation stated in the notice shall become the end of the policy period unless the insured  surrenders the policy and requests cancellation prior to the date and hour specified in the cancellation notice.

(4) Delivery of such written notice either by such insured or by the company shall be equivalent to mailing.

(b)  If the reason or reasons for such cancellation are not included in the notice of cancellation, then at the written request of the named insured, mailed or delivered to the insurer not later than fifteen (15) days subsequent to the effective date of cancellation, the insurer shall specify any and all reasons for such cancellation. The above cancellation provisions of this subsection only apply to policies which have been in force sixty (60) days beyond the initial effective date. Every renewal policy shall be presumed to be in effect for at least sixty (60) days. Any notice of cancellation shall advise insured that insured may request the reasons for such cancellation by written request mailed or delivered to the insurer not later than fifteen (15) days subsequent to the effective date of cancellation.

(c)  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any insurer, its authorized representative, its agents, its employees, or any firm, person or corporation furnishing to the insurer information as to the reason for cancellation, for any statement made by any of them in any written notice of cancellation, for the providing of information pertaining thereto, or for statements made or evidence submitted at any hearings conducted in connection therewith.

[Acts 1968, ch. 582, § 3; 1979, ch. 357, §§ 1, 2; T.C.A., § 56-1156.]

56-7-1304. Notice of intention not to renew.

(a)  Nothing in this part applies to non-renewable, except that in the event the company does not intend to renew the contract, it shall mail or deliver to the named insured, at the address shown in the policy, not less than thirty (30) days' notice of its intention not to renew. Proof of mailing of notice shall be sufficient proof of notice.

(b)  Unless the non-renewable notice contains a reason for such non-renewable action, such notice shall advise the insured that upon written request of the named insured, mailed or delivered to the insurer not later than fifteen (15) days after the effective date of the non-renewable, the insurer will within twenty (20) days mail to the named insured a written statement specifying a reason for such non-renewable action. There shall be no liability on the part of and no cause of action of any nature shall arise against any insurer, its authorized representative, its agents, its employees, or against any firm, person or corporation furnishing information to the insurer, as to reason for non-renewable.

[Acts 1968, ch. 582, § 4; T.C.A., § 56-1157; Acts 1988, ch. 603, § 1; 1989, ch. 110, § 1.]

56-7-1305. Notice of eligibility for assigned risk plan.

When a policy of automobile liability insurance is cancelled, other than for nonpayment of premium, or in the event of failure to renew a policy of automobile liability insurance, the insurer shall notify the named insured of the insured's possible eligibility for automobile liability insurance through the automobile liability assigned risk plan. Such notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew.

[Acts 1968, ch. 582, § 5; T.C.A., § 56-1158.]