Texas Property and Casualty License Practice Exam

Which requirement is not needed from the insured when a policy is canceled?

1. A written request for cancellation

2. Advance notice

3. Immediate payment of premiums

4. No notice is required

The correct answer is: No notice is required

When a policy is canceled, the requirement that no notice is required is correct because, in certain circumstances, an insurer can cancel a policy without providing advance notice to the insured. This can happen in cases of non-payment of premiums, fraud, or serious violations of the policy's terms, where the insurer is permitted by law to terminate coverage effective immediately. In contrast, a written request for cancellation is typically needed when an insured wishes to cancel their own policy, as this ensures that there is a formalized record of the desire to terminate coverage. Advance notice would often be necessary if the cancellation is initiated by the insurer, allowing the insured time to seek alternative coverage. Immediate payment of premiums is a standard requirement to maintain coverage but is not typically related to the cancellation process itself. Thus, the correct selection highlights that there are situations where cancellation can occur without the need for formal notice.