If the policy is canceled or nonrenewed, who must be notified in writing?

• A. The named insured
• B. The mortgagee or other party with a security interest
• C. The insurer's agent
• D. The local government

Answer: (B)

When a policy is canceled or nonrenewed, the party who holds a security interest in the insured property must be notified in writing. This protects the lender’s financial stake and ensures they’re aware of changes that could affect coverage on the collateral they hold. The mortgagee has a right to receive notice so they can take any necessary steps to protect their interest, such as requiring the insured to secure replacement coverage. The insurer's agent and local government aren’t the entities required to receive this notice, and while the named insured normally gets notice as a customer of the insurer, the specific required recipient in this context is the mortgagee or other security-interest holder.