2021 Georgia Code
Title 33 - Insurance
Chapter 24 - Insurance Generally
Article 1 - General Provisions
§ 33-24-44. Cancellation of Policies Generally

1. Except as otherwise provided in this chapter, cancellation of a policy which by its terms and conditions may be canceled by the insurer or its agent duly authorized by the insurer to effect such cancellation shall be accomplished as prescribed in this Code section.
2. Written notice stating the time when the cancellation will be effective, which shall not be less than 30 days from the date of mailing or delivery in person of such notice of cancellation or such other specific 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 any 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. For the purposes of this subsection, notice to the lienholder shall be considered delivered or mailed if, with the lienholder's consent, it is delivered by electronic transmittal or facsimile. Any irregularity in the notice to the lienholder shall not invalidate an otherwise valid cancellation as to the insured.
3. 1. Any unearned premium which has been paid by the insured shall be refunded to the insured on a pro rata basis as provided in this Code section. If the return does not accompany notice of cancellation, then such return shall be made on or before the cancellation date either directly to the named insured or to the insured's agent of record. In the event the insurer elects to return such unearned premium to the insured via the insured's agent of record, such agent shall return the unearned premium to the insured either in person or by depositing such return in the mail within ten working days of receipt of the unearned premium, or within ten working days of notification from the insurer of the amount of return of unearned premium due, or on the effective date of cancellation, whichever is later. If the insured has an open account with the agent, such return of unearned premium may be applied to any outstanding balance and any remaining unearned premium shall be returned to the insured either in person or by depositing such return in the mail within ten working days of receipt of the unearned premium, or within ten working days of notification from the insurer of the amount of return of unearned premium due, or on the effective date of cancellation, whichever is later.
   2. Paragraph (1) of this subsection shall not apply if an audit or rate investigation is required or if the premiums are financed by a premium finance company. If an audit or rate investigation is required, then the refund of unearned premium shall be made within 30 days after the conclusion of the audit or rate investigation. If the premiums are financed by a premium finance company, any unearned premiums shall be tendered to the premium finance company within ten working days after cancellation.
   3. Any insurer or agent failing to return any unearned premium as prescribed in paragraphs (1) and (2) of this subsection shall pay to the insured a penalty equal to 25 percent of the amount of the return of the unearned premium and interest equal to 18 percent per annum until such time that proper return has been made, which penalty and interest must be paid at the time the return is made; provided, however, that the maximum amount of such penalty and interest shall not exceed 50 percent of the amount of the refund due. Failure to return any unearned premium shall not invalidate a notice of cancellation given in accordance with subsection (b) of this Code section.
4. When a policy is canceled for failure of the named insured to discharge when due any of his obligations in connection with the payment of premiums for a policy or any installment of premiums due, whether payable directly to the insurer or indirectly to the agent, or when a policy that has been in effect for less than 60 days is canceled for any reason, the notice requirements of this Code section may be satisfied by delivering or mailing written notice to the named insured and any lienholder, where applicable, at least ten days prior to the effective date of cancellation in lieu of the number of days' notice otherwise required by this Code section. For the purposes of this subsection, notice to the lienholder shall be considered delivered or mailed if, with the lienholder's consent, it is delivered by electronic transmittal or facsimile. Any irregularity in the notice to the lienholder shall not invalidate an otherwise valid cancellation as to the insured.
5. 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 which has been filed with 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 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.
6. Cancellation by the insured shall be accomplished in accordance with Code Section 33-24-44.1.
7. Any unearned premium which has been paid by the insured may be refunded to the insured on other than a pro rata basis if:
   1. The cancellation results from failure of the insured to pay, when due, any premium to the insurer or any amount, when due, under a premium finance agreement;
   2. The policy contains language which specifies that a penalty may be charged on unearned premium; and
   3. The method of computing such penalty is filed with the Commissioner in accordance with Chapter 9 of this title.

(d.1)The notice requirements of this Code section shall not apply in any case where a binder or contract of insurance is void ab initio for failure of consideration.

(d.2)If the terms of a policy permit an audit and the insured fails to submit to or allow an audit for the current or most recently expired term, the insurer may, after two documented efforts to notify the policyholder and the policyholder's agent of potential cancellation, send via certified mail or statutory overnight delivery, return receipt requested, written notice to the named insured at least ten days prior to the effective date of cancellation in lieu of the number of days' notice otherwise required by law; provided, however, that no cancellation notice shall be mailed within 20 days of the first documented effort to notify the policyholder of potential cancellation.

(Code 1933, § 56-2430, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1967, p. 653, § 1; Ga. L. 1968, p. 1126, § 1; Ga. L. 1973, p. 499, § 6; Ga. L. 1975, p. 1242, § 1; Ga. L. 1984, p. 1345, § 4; Ga. L. 1987, p. 1466, § 1; Ga. L. 1995, p. 1011, § 4; Ga. L. 1999, p. 834, § 1; Ga. L. 2005, p. 562, § 1/HB 418; Ga. L. 2014, p. 823, § 1/HB 375; Ga. L. 2014, p. 829, § 5/HB 645; Ga. L. 2015, p. 5, § 33/HB 90; Ga. L. 2016, p. 864, § 33/HB 737.)

- Ga. L. 2014, p. 823, § 2/HB 375, not codified by the General Assembly, provides: "This Act shall be applicable to policies issued or renewed on or after July 1, 2014."

- For article surveying Georgia cases in the area of insurance from June 1979 through May 1980, see 32 Mercer L. Rev. 79 (1980). For annual survey of insurance law, see 35 Mercer L. Rev. 177 (1983). For article, "Insurance," see 53 Mercer L. Rev. 281 (2001). For annual survey of insurance law, see 58 Mercer L. Rev. 181 (2006). For annual survey of law on insurance, see 62 Mercer L. Rev. 139 (2010). For comment on Life Ins. Co. v. Bartlett, 37 Ga. App. 22, 138 S.E. 589 (1927), see 1 Ga. L. Rev. No. 2 P. 49 (1927).

ANALYSIS

• General Consideration
• Exceptions
• Form, Sufficiency, and Proof of Notice

RESEARCH REFERENCES

Am. Jur. 2d.

- 43 Am. Jur. 2d, Insurance, § 397 et seq.

- 45 C.J.S., Insurance, § 817 et seq.

- Insurance: incorrect statement of age, 1 A.L.R. 459; 160 A.L.R. 295.

Provision suspending insurance during default in payment of premiums or assessments as affected by failure of insurer to declare a suspension before loss, 8 A.L.R. 395.

Automobile liability insurance, 13 A.L.R. 135; 19 A.L.R. 879; 23 A.L.R. 1472; 28 A.L.R. 1301; 41 A.L.R. 507.

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

Contract providing that obligation thereof shall be canceled in case of death or other extrinsic event as contract of insurance, 35 A.L.R. 1039; 63 A.L.R. 711; 100 A.L.R. 1449; 119 A.L.R. 1241.

Liability in respect of premium where policy is rejected by applicant or prospect, 41 A.L.R. 644.

Validity and enforceability of contractual stipulation for payment of additional amount in case of delay in payment of insurance dues, premiums, or assessments, 41 A.L.R. 979.

Necessity of giving beneficiary notice before cancellation or forfeiture of insurance for nonpayment of premiums or assessments, 44 A.L.R. 1372.

Practice of taking notes for premiums as waiver of requirement of payment as to premium for which note not given, 53 A.L.R. 915.

Avoidance of renewed fire policy for breach of warranty or representation first made in original application or policy, 62 A.L.R. 823.

Outstanding interest in one to whom loss is payable as ground of forfeiture under condition on insurance policy respecting title or encumbrances, 65 A.L.R. 913.

Contractual provision for lapse of policy or certificate in event of disappearance of insured or his failure to report to insurer, 65 A.L.R. 1038.

Exercise of reserved right to cancel policy of insurance as affected by motive or reason for cancellation, 68 A.L.R. 1171.

Rescission of policy of life or accident insurance after death of insured by agreement, express or implied, with beneficiaries, 80 A.L.R. 185.

Action of insurer in regard to unpaid premium note after maturity as waiver of, or estoppel to claim, forfeiture for nonpayment, 83 A.L.R. 846.

Disability feature of insurance contract as subject of rescission apart from life insurance feature, 91 A.L.R. 1470.

Increase in insurance rates or loss of opportunity to obtain insurance in consequence of another's tort as ground of liability, 92 A.L.R. 1205.

Burden of proof as regards payment or nonpayment of renewal premiums or assessments on policy of life or accident insurance, 95 A.L.R. 745.

Impaired eyesight as within representation, warranty, or condition of insurance policy as regards health or physical condition, 96 A.L.R. 429.

Construction, application, and effect of provisions of war risk insurance precluding or terminating, because of misconduct, the right of one otherwise entitled to benefits, 99 A.L.R. 1284.

Continued acceptance of insurance premiums or dues as basis of waiver of, or estoppel to assert, misrepresentation or breach affected by alternative obligation which survived misrepresentation or breach, 101 A.L.R. 1138.

Conclusiveness of insurer's statement to insured or beneficiary after lapse as to period of extended insurance or amount of paid-up insurance, 103 A.L.R. 1364.

Death of insured or other loss pending application not effectively granted, for reinstatement of life or accident insurance, after lapse, 105 A.L.R. 478; 164 A.L.R. 1057.

Scope and application of limitation provision of statute or policy against actions under forfeited policy, 105 A.L.R. 1093.

Equity jurisdiction for cancelation of insurance policy upon ground within incontestable clause prior to termination of period, 111 A.L.R. 1275.

Computation of cash surrender value or extended or paid-up insurance as affected by loan on policy, 113 A.L.R. 606.

Payment or tender, after lapse of policy for nonpayment of premium, of amount of loan on policy as affecting computation of paid-up or extended insurance, 114 A.L.R. 901.

Admissibility and weight on question of materiality of misrepresentation, of testimony of officers or employees of insurer to effect that application would not have been accepted but for misrepresentation, or that there was a rule or policy to reject risks of the kind that would have been shown but for the misrepresentation, 115 A.L.R. 100.

Rights and obligations of conditional purchaser of automobile, or one in same right, and insurer, as affected by notice of cancelation of policy given by insurer to conditional seller or finance company, 115 A.L.R. 482.

False answer in application for life insurance to question regarding previous rejection, 120 A.L.R. 1425.

Wrongful termination of policy by insurer, or false information to insured in that regard, as excusing further tend and payment of premiums or assessments, 122 A.L.R. 385; 160 A.L.R. 629.

Cancellation of life insurance policy for nonpayment of loan, 126 A.L.R. 102.

Repayment or tender of unearned premium as condition precedent to exercise by insurer of right to cancel policy, 127 A.L.R. 1341; 16 A.L.R.2d 1200.

Right to return of premiums paid upon insurance policy which is void ab initio, 129 A.L.R. 57.

Grounds for cancellation or rescission of annuity agreement, or for recovery back of property conveyed, or money paid, thereunder, 131 A.L.R. 424.

Materiality of false representation, in application for policy of insurance, as to whether applicant has consulted physicians, 131 A.L.R. 617.

Duty of life insurer, or its agents, to inform or explain to insured his rights under policy before accepting his surrender the same, 131 A.L.R. 1299.

Notice to insured of insufficiency to meet premiums of cash or loan value, reserve, or dividends, 140 A.L.R. 683.

Falsity of representation or warranty as defense to action upon policy of insurance on life of infant, 143 A.L.R. 331.

Mutual rescission, waiver, ratification, or estoppel, as regards insurer's attempt to rescind policy of insurance or particular provisions thereof, 152 A.L.R. 95.

Defense predicated upon falsity of answer to question in original application for insurance, or in application for reinstatement, as to whether applicant has had any serious illness or disease, 153 A.L.R. 709.

Suspension of contestable period of incontestable clause of life insurance policy pending appointment of personal representative of insured or of beneficiary, 157 A.L.R. 1204.

Wrongful termination of policy by insurer, or false information to insured in that regard, as excusing further tend and payment of premiums or assessments, 160 A.L.R. 629.

Express provisions in life, accident, or health policies that authorize refusal of renewal premiums or otherwise make renewal optional with insurer, 161 A.L.R. 193.

Sale of land with reservation of insured building as violation of provisions of insurance policy, 173 A.L.R. 1207.

Construction and application of provision of statute designed to prevent avoidance of automobile liability policy by reason of violation of its exclusions or conditions, or other terms, 1 A.L.R.2d 822.

Clause in life, accident, or health policy excluding or limiting liability in case of insured's use of intoxicants or narcotics, 13 A.L.R.2d 987.

Judgment avoiding indemnity or liability policy for fraud as barring recovery from insurer by or on behalf of third person, 18 A.L.R.2d 891.

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

Insured's discontinued breach of warranty relating to use or keeping of prohibited articles as barring recovery on fire policy, 44 A.L.R.2d 1048.

Receipt of check for insurance premium as preventing forfeiture for nonpayment, 50 A.L.R.2d 630.

Insurer's previous custom in giving notice of due date of premiums as affecting its right to declare liability policy forfeited or canceled for failure to pay premium, 52 A.L.R.2d 1157.

Provision of policy for mailing of notice to insured's address as stated therein, as affected by change of address, 63 A.L.R.2d 570.

Cancellation or modification of master policy as termination of coverage under group policy, 68 A.L.R.2d 249.

False statements favorable to defense, made and persisted in by insured, as breach of cooperation clause, 79 A.L.R.2d 1040.

Insurer's denial of renewal of policy: waiver and estoppel, 85 A.L.R.2d 1410.

Right of insurance agent to sue in his own name for unpaid premium, 90 A.L.R.2d 1291.

Physician giving medical examination to insurance applicant as agent of insured or of insurer, 94 A.L.R.2d 1389.

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.

Insurance agent's statement or conduct indicating that insurer's cancellation of policy shall not take effect as binding on insurer, 3 A.L.R.3d 1135.

Dividends as preventing lapse of policy for nonpayment of premiums, 8 A.L.R.3d 862.

Insured's cooperation with claimant in establishing valid claim against insurer as breach of cooperation clause, 8 A.L.R.3d 1345.

Insured's failure to inform insurer of pending condemnation proceedings as concealment of fraud within provision of fire policy, 9 A.L.R.3d 1411.

Overvaluation in proof of loss of property insured as fraud avoiding fire insurance policy, 16 A.L.R.3d 774.

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

Insured's misrepresentation or misstatement as to his name or marital status as ground for avoiding liability insurance, 27 A.L.R.3d 849.

What constitutes "serious illness," "serious disease," or equivalent language used in insurance application, 28 A.L.R.3d 1255.

Remedies and measure of damages for wrongful cancellation of life, health, and accident insurance, 34 A.L.R.3d 245.

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

Liability insurer's unconditional right to cancel policy as affected by considerations of public policy, 40 A.L.R.3d 1439.

Construction and effect of arrangement under which insurance premiums are paid automatically via insurer's draft on insured's bank account, 45 A.L.R.3d 1349.

Elimination of particular coverage, or termination, of health, hospitalization, or medical care insurance policy as affecting insurer's liability for insured's continuing hospitalization or medical expenses relating to previously covered illness, 66 A.L.R.3d 1205.

Libel and slander: privileged nature of communications between insurer and insured, 85 A.L.R.3d 1161.

Wrongful cancellation of medical malpractice insurance, 99 A.L.R.3d 469.

Construction, application, and effect of clause that liability insurance policy may be canceled by insured by mailing to insurer written notice stating when thereafter such cancellation shall be effective, 11 A.L.R.4th 456.

Obtaining new property insurance as cancellation of existing insurance, 11 A.L.R.4th 774.

Termination of employee's individual coverage under group policy for nonpayment of premiums, 22 A.L.R.4th 321.

Actual receipt of cancellation notice mailed by insurer as prerequisite to cancellation of insurance, 40 A.L.R.4th 867.

Cancellation of compulsory or "financial responsibility" automobile insurance, 44 A.L.R.4th 13.