2020 Georgia Code
Title 33 - Insurance
Chapter 24 - Insurance Generally
Article 1 - General Provisions
§ 33-24-46. Cancellation or Nonrenewal of Certain Property Insurance Policies

1. This Code section shall apply only to policies of insurance against direct loss to residential real property and the contents thereof, as defined and limited in standard fire policies insuring natural persons as the named insured.
2. As used in this Code section, the term:
   1. "Claim against a policy" means a contact with an insurer by the insured under the policy or an affected third party for the express purpose of seeking payment of proceeds under the terms of the policy in question. A report of loss or a question relating to coverage shall not independently establish a claim against a policy nor be considered as a claim under Article 2 of Chapter 6 of this title.
   2. "Nonrenewal" or "nonrenewed" means a refusal by an insurer or an affiliate of an insurer to renew. Failure of an insured to pay the premium as required of the insured for renewal, a change in policy terms, or a reduction in coverage after the insurer has manifested a willingness to renew by delivering a renewal policy, renewal certificate, or other evidence of renewal to the named insured or his or her representative or has offered to issue a renewal policy, certificate, or other evidence of renewal or has manifested such intention by any other means shall not be construed to be a nonrenewal.
   3. "Policies" means a policy insuring a natural person as named insured against direct loss to residential real property and the contents thereof, as defined and limited in standard fire policies as approved by the Commissioner.
   4. "Reduction in coverage" means a change made by the insurer which results in a removal of coverage, diminution in scope or less coverage, or the addition of an exclusion. Reduction in coverage shall not include any change, reduction, or elimination of coverage made at the request of the insured. The correction of typographical or scrivener's errors or the application of mandated legislative changes shall not be considered a reduction in coverage.
   5. "Renewal" means issuance and delivery by an insurer or an affiliate of such insurer of a policy superseding at the end of the policy period a policy previously issued and delivered by the same insurer or issuance and delivery of a certificate or notice extending the term of a policy beyond its policy period or term or the extension of the term of a policy beyond its policy period or term pursuant to a provision for extending the policy by payment of a continuation premium. Any policy with a policy period or term of less than six months shall, for the purposes of this Code section, be considered to have successive policy periods ending each six months following its original date of issue and, regardless of its wording, any interim termination by its terms or by refusal to accept premiums shall be a cancellation subject to this Code section. Any policy written for a term longer than one year or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of one year and any termination by an insurer effective on an anniversary date of such policy shall be deemed a refusal to renew.
3. 1. No notice of cancellation of a policy as to which this Code section applies shall be effective unless mailed or delivered as prescribed in Code Section 33-24-44.The insurer shall provide the reason or reasons for such cancellation as required by Chapter 39 of this title.
   2. After coverage under a policy to which this Code section applies has been in effect more than 60 days or after the effective date of a renewal policy to which this Code section applies, a notice of cancellation may be issued only for one or more of the following reasons:
      1. Nonpayment of premium;
      2. Discovery of fraud, concealment of material fact, or material misrepresentation made by or with the knowledge of the insured in obtaining the policy, continuing the policy, or presenting a claim under the policy;
      3. The occurrence of a change in the risk which substantially increases any hazard the policy insures against; or
      4. The insured violates any of the material terms or conditions of the policy.
4. 1. No insurer shall refuse to renew a policy to which this Code section applies unless a written notice of nonrenewal is mailed or delivered in person to the named insured. Such notice stating the time when nonrenewal will be effective, which shall not be less than 30 days from the date of mailing or delivery of such notice of nonrenewal or such longer period as may be provided in the contract or by statute, shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the insured and of the lienholder, where applicable, and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service. The insurer shall provide the reason or reasons for nonrenewal as required by Chapter 39 of this title.
   2. An insurer shall provide a written notice of a reduction in coverage to the named insured no less than 30 days prior to the effective date of the proposed reduction in coverage; provided that such notice shall be in a separate document with the words "NOTICE OF REDUCTION IN COVERAGE" written in all capital letters in at least 12 point type. Such notice shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of the insured and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
5. When a policy is canceled other than for nonpayment of premium or in the event of a refusal to renew or continue a policy, the insurer shall notify the named insured of his possible eligibility for insurance through the Georgia Fair Access to Insurance Requirements Plan. The notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew or not to continue the policy and shall state that such notice availability of the Georgia Fair Access to Insurance Requirements Plan is given pursuant to this Code section. Included in the notice shall be the address by which the Georgia Fair Access to Insurance Requirements Plan might be contacted in order to determine eligibility.
6. There shall be no liability on the part of and no cause of action of any nature shall arise against the Commissioner or his employees or against any insurer, its authorized representatives, its agents, its employees, or any firm, person, or corporation furnishing to the insurer information as to reasons for cancellation or nonrenewal for any statement made by any of them and in written notice of cancellation or nonrenewal or in any other communication, oral or written, specifying the reasons for cancellation or nonrenewal or providing information pertaining thereto or for statements made or evidence submitted at any formal or informal hearing conducted in connection therewith.
7. Return of unearned premium, if any, due to cancellations as to which this Code section applies shall be processed in accordance with Code Section 33-24-44.
8. Notice to the insured shall not be required by this Code section when a policy is canceled by an insurance premium finance company under a power of attorney contained in an insurance premium finance agreement if notification of the existence of the premium finance agreement has been given to the insurer in accordance with the provisions of Chapter 22 of this title. However, the insurer shall comply with the provisions of subsection (d) of Code Section 33-22-13 pertaining to notice to a governmental agency, mortgagee, or other third party. Such notice shall be delivered as provided in subsection (d) of Code Section 33-24-14, in person, or by depositing the notice in the United States mail to be dispatched by at least first-class mail to the last address of record of such governmental agency, mortgagee, or other third party and receiving the receipt provided by the United States Postal Service or such other evidence of mailing as prescribed or accepted by the United States Postal Service.
9. Cancellation by the insured shall be accomplished as provided in Code Section 33-24-44.1.
10. No notice refusing the renewal of a policy issued for delivery in this state shall be mailed or delivered by an insurer or its agent duly authorized to effect such notice of nonrenewal for the following reasons:
    1. Lack of, lack of potential for, or failure to agree to a writing of supporting insurance business;
    2. A change in the insurer's eligibility rules or underwriting rules, provided that this paragraph shall not apply to a change in such rules if the change applies uniformly within a specific class or territory and such change has been approved by the Commissioner under subsection (k) of this Code section; and
    3. Two or fewer claims against the policy within the preceding 36 month period if such claims are not attributable to the negligent or intentional acts of the insured or of persons residing at the insured premises.
11. If the insurer demonstrates to the satisfaction of the Commissioner that renewal would violate the provisions of this title or would be hazardous to its policyholders or the public, paragraph (2) of subsection (j) shall not apply.
12. 1. If the insurer complies with subsection (d) of this Code section, no claim or action may be maintained with respect to a policy which is not renewed unless the named insured files a written notice with the insurer before the time at which nonrenewal becomes effective. The notice shall specify the manner in which the failure to renew is alleged to be unlawful under this subsection. In any subsequent action asserting a violation of subsection (c), (j), or (k) of this Code section, no violation may be alleged other than the specific allegations contained in the notice filed by the named insured.
    2. In addition to other requirements, a notice of nonrenewal shall contain the provisions of paragraph (1) of this subsection in substantially the form which follows:

       If you do not file the written notice, you may not later assert a claim or action against this insurer based upon an unlawful nonrenewal."

13. 1. Notwithstanding subsection (j) of this Code section, the termination of an agency relationship shall be valid as a reason for a failure to renew a policy. In such case, if the named insured wishes to retain the policy with the particular insurer, the insured shall locate another agent of the insurer and apply for the policy with another agent of the insurer before the time at which the nonrenewal becomes effective. Upon receipt of the application, the insurer shall treat the application as a renewal and not as an original writing. Nothing in this paragraph shall abridge or supersede contractual rights of the terminated agency or the insurer, provided that these contractual rights do not adversely affect the privilege of the named insured to apply for renewal through another agent of the insurer.
    2. A notice of nonrenewal based upon the termination of an agency relationship shall contain the provisions of paragraph (1) of this subsection, in substantially the form which follows:

- Pursuant to Code Section 28-9-5, in 1985, in subsection (b), paragraph (1) was redesignated paragraph (3) and paragraph (3) was redesignated paragraph (1) to arrange the defined terms in alphabetical order.

Pursuant to Code Section 28-9-5, in 1988, "insured" was substituted for "insurer" in the first sentence of paragraph (l)(1).

Pursuant to Code Section 28-9-5, in 1995, "an insurer" was substituted for "a insurer" in paragraph (b)(1).

- For annual survey on insurance law, see 70 Mercer L. Rev. 111 (2018).

JUDICIAL DECISIONS

Notice to mortgagee.

- Fire insurer was not required to give written notice to the mortgagee of the insurer's nonrenewal of a policy at the end of the term based on the failure of the insured mortgagor to pay the premium. Southern Gen. Ins. Co. v. Tippins Bank & Trust Co., 213 Ga. App. 176, 444 S.E.2d 331 (1994), aff'd, 266 Ga. 97, 464 S.E.2d 381 (1995).

- Standard form homeowners insurance policies covered diminished value when loss was not otherwise defined and an endorsement providing that loss did not include diminution in value was ineffective as to renewal policies absent a notice informing policyholders that coverage for diminished value was not renewed. Thompson v. State Farm Fire & Cas. Co., 264 F. Supp. 3d 1302 (M.D. Ga. 2017).

- Cancellation was authorized because premises that were used as a residence and for ordinary farm activities only were subsequently used to conduct horse shows and rodeos with public attendance. Manley v. Willis, 241 Ga. App. 158, 526 S.E.2d 370 (1999).

Cited in Protective Nat'l Ins. Co. v. Ashley, 182 Ga. App. 526, 356 S.E.2d 230 (1987); Strickland Gen. Agency v. Puritan Ins. Co., 184 Ga. App. 286, 361 S.E.2d 186 (1987).

RESEARCH REFERENCES

Am. Jur. 2d.

- 43 Am. Jur. 2d, Insurance, § 378 et seq.

- 44 C.J.S., Insurance, § 551 et seq. 45 C.J.S., Insurance, § 781 et seq.

- Insurance: guaranty fund as preventing forfeiture for nonpayment of premiums or assessments, 29 A.L.R. 517.

Repayment or tender of unearned premium as condition precedent to exercise by insurer of right to cancel policy, 16 A.L.R.2d 1200.

Limitations governing action to recover unearned premium retained by insurer upon cancellation of policy, 29 A.L.R.2d 938.

Effect of attempt to terminate insurance or fidelity contract upon notice allowing a shorter period than that stipulated in contract, 96 A.L.R.2d 286.

Construction of express insurance policy provision restricting insurer's right to cancel or otherwise terminate coverage, 19 A.L.R.3d 1429.

Remedies and measure of damages for wrongful cancellation of liability and property insurance, 34 A.L.R.3d 385.

Right of mortgagee to notice by insurer of expiration of fire insurance policy, 60 A.L.R.3d 164.

Obtaining new property insurance as cancellation of existing insurance, 14 A.L.R.4th 781.

Insured's right of action for arbitrary nonrenewal of policy, where insurer has option not to renew, 37 A.L.R.4th 862.