During the policy term, which of the following is NOT listed as a valid reason for cancellation?

• A. Fraud in obtaining coverage
• B. Failure to pay premiums when due
• C. Increase in hazard within the insured's control that would produce a rate increase
• D. Change in hazard not within the insured's control

Answer: (D)

Mid-term cancellation is limited to situations where the insured’s actions or obligations create measurable increases in risk or where the applicant breached terms of the policy. Specifically, reasons that justify canceling during the term include fraud in obtaining coverage, failure to pay premiums when due, and a material increase in hazard that is caused by the insured and would raise the rate.

A change in hazard not within the insured’s control is not listed as a valid mid-term cancellation reason. Changes outside the insured’s control may affect underwriting at renewal or result in different adjustments, but they aren’t grounds for canceling the policy during the term.