After the policy has been in effect for at least 60 days, which of the following is NOT a valid ground for cancellation by the insurer?

• A. Nonpayment of premium
• B. Driver's license suspension
• C. Misrepresentation of material fact
• D. Change in vehicle ownership

Answer: (D)

The key idea is what grounds an insurer can use to cancel a policy after it has been in force for at least 60 days. Once past that initial period, cancellation is generally limited to issues that affect risk or compliance: nonpayment of the premium, misrepresentation of a material fact, or a driver’s license suspension. These situations directly impact the insurer’s risk or the policy’s terms.

A change in vehicle ownership does not by itself create a risk or compliance issue that justifies cancellation after 60 days. If the vehicle changes hands, the insurer would typically handle it by transferring the policy to the new owner or arranging a new policy, rather than canceling the existing policy solely because ownership changed. That’s why this option is the one that is not a valid cancellation ground in this scenario. The other three—nonpayment of premium, misrepresentation of a material fact, and driver’s license suspension—are valid grounds because they directly affect risk or eligibility under the contract.