Your Policy Rights Applying For a Policy If an Insurer Denies Your Application If an insurer decides not to issue you an insurance policy when you submit your initial application, the insurer must inform you that you have a right to know why you are not being offered a policy. To receive an explanation, you must submit a written request to the insurer asking to be provided with the reasons you were refused coverage. See AS 21.36.440. Failure to Maintain Continuous Auto Coverage An insurer may not use your failure to maintain continuous automobile insurance coverage as a rating factor, unless this failure results in a violation of Alaska’s Mandatory Insurance Act. See Order R93-05. Cancellation Cancellation is the termination of a policy before it expires, at anytime during the policy term. An Insurer CAN Cancel a Policy in the First 60 Days If your policy has been in effect for less than 60 days, the insurer may cancel it for any reason. When your policy has been in effect for longer than 60 days, or your policy is a renewal, it may only be cancelled for a limited number of reasons. An Insurer CAN Cancel an Auto Policy if 1. You don’t pay the policy premiums. 2. The driver’s license or motor vehicle registration of either you, an operator who resides in your household, or an operator who customarily drives an automobile insured by your policy has been suspended or revoked during the policy period, or if your policy is a renewal, during its policy period or the 180 days immediately before the renewed policy’s effective date. An Insurer CAN Cancel Other Personal Policies if 1. You don’t pay the policy premiums. 2. You are convicted of a crime that by its nature increases the risk that your policy insures against. 3. Discovery of fraud or material misrepresentation made by you or your representative in obtaining the insurance or by you in pursuing a claim under the policy. 4. Discovery of a grossly negligent act or omission by you that substantially increases the risks your policy insures against. 5. Physical changes in the insured property that result in the property becoming uninsurable. See AS 21.36.210. An Insurer Must Provide Written Notice Before Canceling Your Policy The insurer must provide you or, if you are 70 years or older, your named designee, with 30 days written notice prior to canceling your policy with the following exceptions: 1) if the policy is cancelled for nonpayment of premium, the insurer needs to provide you with only 20 days written notice; 2) if a policy is cancelled due to a conviction of a crime having as one of its necessary elements an act increasing the hazard insured against, or the insurer discovers fraud or material misrepresentation made by you in obtaining insurance or pursuing a claim, the insurer needs to provide you with only 10 days written notice; 3) if a motor vehicle policy is cancelled due to the suspension or revocation of a driver’s license, the insurer needs to provide you with only 10 days written notice. See AS 21.36.210 – AS 21.36.220. When an Insurer Must Notify You of the Auto Assigned Risk Plan Option If your automobile policy is cancelled other than for nonpayment of premium or is not renewed, the insurer must notify you of possible eligibility for automobile insurance through the automobile assigned risk plan. The automobile assigned risk plan is a way for drivers who would be denied coverage by insurance companies to get automobile insurance that is required by law. See AS 21.36.25. An Insurer Must Provide Reason for Cancellation If the insurer cancels your policy, the cancellation notice must include or be accompanied by a statement giving the reason for the cancellation. See AS 21.36.220(e). Receiving Credit for Unearned Premium When an Insurer Cancels Your Policy Unearned premium refers to the premium paid in advance for insurance that will not be provided because the policy was cancelled before the end of the policy period. If the insurer cancels your policy, the insurer must return or credit any unearned premium before the effective date of cancellation, with the following exceptions. Premium must be returned within 45 days after notice of cancellation is given for any of these five reasons: 1. You don’t pay the policy premiums. 2. You are convicted of a crime that by its nature increases the risk that your policy insures against. 3. Fraud or material misrepresentation made by you or your representative in obtaining the insurance or by you in pursuing a claim under the policy is discovered. 4. You fail or refuse to provide the information necessary to confirm exposure or necessary to determine the policy premium. 5. The driver’s license or motor vehicle registration of either you, an operator who resides in your household, or an operator who customarily drives an automobile insured by your policy has been suspended or revoked during the policy period, or if your policy is in renewal, during its policy period or the 180 days immediately before the renewed policy’s effective date. See AS 21.36.220(c). Receiving Credit for Unearned Premium When You Cancel Your Policy If you cancel your policy, the insurer must return or credit any unearned premium within 45 days of receipt of the request for cancellation or the effective date, whichever is later. A cancellation fee not to exceed 7.5% of the unearned premium may be deducted from the return premium if this is stated in your policy. See AS 21.36.255. Nonrenewal Non-renewal, or failure to renew, is the insurance company’s decision to not issue and deliver a replacement policy at the end of the policy period. When an Insurer Can Choose Not to Renew a Policy An insurer may only fail to non-renew a personal insurance policy on the policy’s annual anniversary. For example, many automobile policies are written for a term of six months. If the insurer or insured do not cancel the policy during the six months the policy is in effect, the insurer must issue a renewal policy for another six months. Only at the end of the second six month period, the policy’s annual anniversary, may the insurer decide that it will not issue a replacement policy. See AS 21.36.240. An Insurer Choosing Not to Renew a Policy Must Give You 20 Days Notice An insurer must provide you with 20 days written notice prior to not renewing your policy. See AS 21.36.240. Premium Changes When an Insurer Increases Your Renewal Premium The insurer must provide you with 20 days written notice if the renewal premium is increased more than 10 percent for a reason other than an increase in coverage or exposure base, or if after renewal there will be a material restriction or reduction in coverage not specifically requested by you. See AS 21.36.235. If You Receive a Moving Traffic Violation, But Have Not Been Convicted An insurer may not increase the premium or add a surcharge to your personal automobile insurance policy because of the issuance of a citation for a moving traffic violation unless you have been convicted of the violation or entered a plea of no contest to the violation. See AS 21.36.305.