§ 58-41-25. Notice of renewal of policies with premium rate or coverage changes. - North Carolina Statutes

§58‑41‑25.  Notice of renewal of policies with premium rate orcoverage changes.

(a)        If an insurerintends to renew a policy, the insurer must furnish to the insured the renewalterms and a statement of the amount of premium due for the renewal policy period. This section applies only if the insurer intends to decrease coverage, increasedeductibles, impose any kind of surcharge, or increase the premium rate in therenewal policy.

(b)        If the policy beingrenewed was written for a term of one year or less, the renewal terms andstatement of premium due must be given or mailed not less than 45 days beforethe expiration date of that policy.  If the policy being renewed was writtenfor a term of more than one year or for an indefinite term, the renewal terms andstatement of premium due must be given or mailed not less than 45 days beforethe anniversary date of that policy.  The renewal terms and statement ofpremium due must be given or mailed to the insured and any designated mortgageeor loss payee at their addresses shown in the policy, or, if not indicated inthe policy, at their last known addresses.

(c)        If the insurerfails to furnish the renewal terms and statement of premium due in the mannerrequired by this section, the insured may cancel the renewal policy within the30‑day period following receipt of the renewal terms and statement ofpremium due.  For refund purposes, earned premium for any period of coverageshall be calculated pro rata upon the premium applicable to the policy beingrenewed instead of the renewal policy.  If an insurer fails to comply with the45‑day notice requirement of this section, the insured is entitled to theoption of coverage under the policy being renewed and at the same cost of thatpolicy until 45 days have elapsed after the insurer has provided the insuredwith the notice.

(d)        If a policy hasbeen issued for a term longer than one year, and for additional consideration apremium has been guaranteed for the entire term, it is unlawful for the insurerto increase that premium or require policy deductibles or other policy orcoverage provisions less favorable to the insured during the term of thepolicy.

(e)        Copies of thenotice required by this section shall also be given or mailed to any designatedmortgagee or loss payee and may also be given or mailed to the agent or brokerof record. (1985 (Reg. Sess., 1986), c. 1027, s. 14; 1987, c.441, ss. 5, 6; 1989, c. 485, ss. 5, 6.)