Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) For the purpose of cancellation or nonrenewal
pursuant to Insurance Code Section
1861.03(c),
none of the following events or characteristics constitutes a substantial increase
in the hazard insured against:
(1) the physical or
mental health of the either the insured or any principal or occasional driver of the
insured vehicle, unless the Department of Motor Vehicles has suspended, revoked, or
refused to issue a license pursuant to suspension of a license, the suspension is
not removed prior to the time that the nonrenewal or cancellation of the policy
becomes effective;
(2) a physical
disability of the insured or any principal or occasional driver of the insured
vehicle, unless the insured, principal or occasional driver has failed to comply
with a requirement of the California Department of Motor Vehicles, or the
appropriate agency in the state that has issued the driver's license for the
insured, regarding vehicle equipment or modification of the vehicle;
(3) the occupation or change in the occupation of
the insured or any principal or occasional driver of the insured vehicle;
(4) the age of the insured or any principal or
occasional driver of the insured vehicle;
(5) the age of the insured vehicle;
(6) the cosmetic appearance of the insured
vehicle. "Cosmetic appearance" means damage that does not affect the safe operation
of the insured vehicle;
(7) the
termination or other change in the relationship between the insurer and the
insurer's agent that issued, renewed, serviced or was otherwise responsible in any
manner for the insured's policy.
(8)
addition, deletion, substitution or replacement of vehicle. Notwithstanding the
foregoing, an insurer may cancel or nonrenew a policy under the following
circumstances:
(A) for an insurer that does not
insure motorcycles or motor-driven cycles, if a motorcycle or motor-driven cycle
would be added to the policy, whether by substitution, replacement, or otherwise;
or,
(B) for an insurer that does not
insure four-wheeled private passenger automobiles, if a four-wheeled private
passenger automobile would be added to the policy, whether by substitution,
replacement or otherwise;
(9)
except as provided for in subpart (b), change in the use of the
vehicle.
(b) For the purpose
of cancellation or nonrenewal pursuant to Insurance Code Section
1861.03(c),
the following events or characteristics shall constitute a substantial increase in
the hazard insured against:
(1) the refusal or
failure by the insured to provide to the insurer, within 30 days after reasonable
written request to the insured, information necessary to accurately underwrite or
classify the risk. Every written request for information to an insured shall contain
a prominent notice, in both English and Spanish, advising the insured that the
insured's failure to provide the requested information within the time required may
result in the cancellation or nonrenewal of the insured's policy;
(2) permissive use of the insured vehicle by
persons other than the insured and principal or occasional drivers of the insured
vehicle, to an extent that indicates regular use of the vehicle by such
persons;
(3) the failure of the insured
vehicle to comply with California or federal safety requirements if such failure is
not removed prior to the time that the insurer's nonrenewal or cancellation of the
policy becomes effective;
(4) the
alteration of the insured vehicle in order to increase speed or acceleration
capabilities which renders the insured vehicle unsafe in violation of California
Vehicle Code Section
24002;
(5) suspension of the license of the insured if
such suspension is not removed prior to the time that the insurer's nonrenewal or
cancellation of the policy becomes effective. Notwithstanding the foregoing, a
suspension shall not be grounds for cancellation or nonrenewal if it is based on the
insurer's failure to make a filing required by the California Insurance or Vehicle
Codes, and if a request for such a filing was made by the insured;
(6) revocation of the license of the insured for
any reason other than an insurer's failure to make a filing required by the
California Insurance Code.
(7)
expiration of the license of the insured if the insured has not obtained a valid
license prior to the time that the insurer's nonrenewal or cancellation of the
policy becomes effective.
(8) change in
the use of the insured vehicle to commercial use, if such a change in use is
prohibited under the terms of the policy of insurance or binder issued to the
policyholder.
(9) a conviction of any
alcohol-related offense specified in Sections 23152; 23153; 23220; 23221; 23222;
23224; or 23226 of the California Vehicle Code, provided the person does not
otherwise qualify to purchase a good driver discount policy pursuant to Section
1861.025.
(c) For the purpose
of nonrenewal pursuant to Insurance Code Section
1861.03(c),
the following circumstances shall constitute a substantial increase in the hazard
insured against:
(1)
(A) the insured or principal or occasional driver
of the insured vehicle has been assessed a total of three or more violation points
under Section 2632.13.1 within the preceding 36
months. For the purpose of this subpart, traffic violation points may be counted
only for violations that have conviction dates not more than 36 months preceding the
renewal date of the policy; and
(B) at
the time of the expiration of the insured's current policy, the insured is not
eligible under the insurer's then-current underwriting rules to purchase a policy of
private passenger automobile insurance from the insurer;
(2) the assessment of two points by the insurer
under Section 2632.13.1 for the insured or any
principal or occasional driver of the insured vehicle, as a result of a violation of
the California Vehicle Code for which two points are assessed under California
Vehicle Code Section
12810. For the
purpose of this subpart, traffic violation points may be counted only for violations
that have conviction dates not more than 36 months preceding the renewal date of the
policy.
(d) For the purpose of
Subsection (c)(1) only, an insurer may count two violation points for each accident
in which, in accordance with Section
2632.13, the insured or any principal
or occasional driver of the insured vehicle was determined to be principally at
fault and which resulted in bodily injury or in the death of any person. In bodily
injury accidents not resulting in death, the total loss or damage caused by the
accident must exceed $500.00.
(e)
Notwithstanding any other provision of this Section, an insurer may not consider
there to be a substantial increase in the hazard insured against unless part of the
circumstances which constitute the substantial increase in the hazard insured
against occurred after the most recent issuance or renewal of the policy, or unless
part of the circumstances which constitute the substantial increase in hazard meet
the following criteria:
(1) the circumstance is a
traffic violation conviction that,
(A) did not
appear on the public record of traffic violation convictions available from the
California Department of Motor Vehicles, or did not appear on the public records of
other jurisdictions, for which violation points would be counted under Section
2632.13.1; and,
(B) the insurer obtained the public record not
more than 75 days before the most recent renewal or effective date of the policy;
and,
(C) the insurer had no notice of
the traffic violation conviction when the most recent offer of insurance or renewal
was made; or,
(2) the
circumstance occurred during the 60 days preceding the most recent renewal or
effective date of the policy, and the insurer had no notice
thereof.
(f) Notwithstanding
any other provision of this Section, if a substantial increase in the hazard insured
against exists because of the violation points or circumstances of any person other
than the insured, then a substantial increase in the hazard insured against shall
not exist if the insured excludes such other person from coverage.
1. New section
filed 12-2-93; operative 1-3-94 (Register 93, No. 49).
2. Amendment of
subsections (a)(2), (a)(8)(B) and (b)(4), new subsection (b)(6), subsection
renumbering, and amendment of subsections (c)(1)(A)-(C), (d) and (e)(1)(A) filed
10-5-98; operative 11-4-98 (Register 98, No. 41).
3. Amendment of
subsection (b)(3), new subsection (b)(4), subsection renumbering, new subsection
(b)(9), repealer of subsection (c)(1)(A), subsection relettering, amendment of newly
designated subsection (c)(1)(A), and amendment of subsection (c)(2) filed 10-5-98;
operative 11-4-98 (Register 98, No. 41).
4. Change without regulatory
effect amending subsections (c)(1)(A), (c)(2) and (e)(1)(A) filed 5-13-2013 pursuant
to section 100, title 1, California Code of
Regulations (Register 2013, No. 20).
5. Change without regulatory effect
amending subsection (b)(1) filed 7-14-2021 pursuant to section
100, title 1, California Code of
Regulations (Register 2021, No. 29). Filing deadline specified in Government Code
section
11349.3(a)
extended 60 calendar days pursuant to Executive Order
N-40-20.
Note: Authority cited: Sections
1861.03,
12921 and
12926 of the
California Insurance Code. Reference: Section
1861.03 of the
California Insurance Code.
