Question

When a new homeowners or personal auto policy is issued, what is the usual length of time that a company can cancel a policy for any reason?

a) 30 days
b) 60 days
c) 90 days
d) 120 days

Answer 1

The usual length of time that an insurance company can cancel a new homeowner's or personal auto policy for any reason is typically 60 days.

Step-by-step explanation:

When a new homeowner's or personal auto policy is issued, insurance companies often have a specific time frame during which they can cancel the policy for almost any reason. This time frame is commonly referred to as the 'binding period.' While this can vary by company and state law, the typical duration for this time period is generally 60 days. After this initial period, cancellation generally requires a more substantial reason, such as non-payment of premiums or fraudulent activity.