Michigan Property & Casualty Limited Lines Practice Exam

Nonrenewal is the term used when an insurer decides not to extend coverage once the current policy term ends. It involves terminating the policy after the term and typically requires giving the named insured a 30-day written notice so they have time to arrange alternative coverage. This differs from cancellation, which ends the policy before its expiration date and follows different notice rules and reasons (such as nonpayment or policy violations). The other options don’t describe ending a policy at the term’s end—territory refers to geographic coverage areas, and endorsements are changes or additions to the policy terms.