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SB-1295 Automobile insurance: notice of cancellation.(2023-2024)

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Date Published: 09/30/2024 09:00 PM
SB1295:v95#DOCUMENT

Senate Bill No. 1295
CHAPTER 793

An act to amend Section 662 of the Insurance Code, relating to insurance.

[ Approved by Governor  September 27, 2024. Filed with Secretary of State  September 27, 2024. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 1295, Rubio. Automobile insurance: notice of cancellation.
Under existing law, a notice of cancellation of an automobile insurance policy shall not be effective unless mailed or delivered by the insurer to the named insured, lienholder, or additional interest at least 20 days prior to the effective date of cancellation, and at least 10 days’ notice of cancellation when the reason for cancellation is for nonpayment of premium. For purposes of this provision, nonpayment of premium means failure of the named insured to discharge when due any of their obligations in connection with the payment of premiums on a policy, or any installment of the premium, as specified. Existing case law requires the 10-day notice period for nonpayment to commence after default.
This bill would require that the 10-day notice period for nonpayment commence after nonpayment of premium due by the specified due date and make a cancellation for nonpayment effective, as specified, if the insured has not cured the nonpayment of premium due identified in the notice by the end of the 10-day period.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 662 of the Insurance Code is amended to read:

662.
 (a) (1) A notice of cancellation of a policy shall not be effective unless mailed or delivered by the insurer to the named insured, lienholder, or additional interest at least 20 days prior to the effective date of cancellation; provided, however, that where cancellation is for nonpayment of premium, at least 10 days’ notice of cancellation after nonpayment of premium due by the specified due date accompanied by the reason for the cancellation shall be given. Unless the reason accompanies or is included in the notice of cancellation, the notice of cancellation shall state or be accompanied by a statement that upon written request of the named insured, mailed or delivered to the insurer not less than 15 days prior to the effective date of cancellation, the insurer will specify the reason for the cancellation.
(2) A cancellation based on nonpayment of premium shall only be effective on the date specified in the notice if the insured has not cured the nonpayment of premium due identified in the notice by the end of the 10-day period.
(b) This section shall not apply to nonrenewal.
(c) Notices made to lienholders pursuant to this section may be done electronically with the consent of the lienholder.