Cal. Code Regs. tit. 10 § 2632.19

Current through Register 2024 Notice Reg. No. 45, November 8, 2024

Section 2632.19 - Substantial Increase in Hazard Insured Against

(a) For the purpose of cancellation or nonrenewal pursuant to Insurance Code Section 1861.03(c), none of the following events or characteristics constitutes a substantial increase in the hazard insured against:

(1) the physical or mental health of the either the insured or any principal or occasional driver of the insured vehicle, unless the Department of Motor Vehicles has suspended, revoked, or refused to issue a license pursuant to suspension of a license, the suspension is not removed prior to the time that the nonrenewal or cancellation of the policy becomes effective;

(2) a physical disability of the insured or any principal or occasional driver of the insured vehicle, unless the insured, principal or occasional driver has failed to comply with a requirement of the California Department of Motor Vehicles, or the appropriate agency in the state that has issued the driver's license for the insured, regarding vehicle equipment or modification of the vehicle;

(3) the occupation or change in the occupation of the insured or any principal or occasional driver of the insured vehicle;

(4) the age of the insured or any principal or occasional driver of the insured vehicle;

(5) the age of the insured vehicle;

(6) the cosmetic appearance of the insured vehicle. "Cosmetic appearance" means damage that does not affect the safe operation of the insured vehicle;

(7) the termination or other change in the relationship between the insurer and the insurer's agent that issued, renewed, serviced or was otherwise responsible in any manner for the insured's policy.

(8) addition, deletion, substitution or replacement of vehicle. Notwithstanding the foregoing, an insurer may cancel or nonrenew a policy under the following circumstances:

(A) for an insurer that does not insure motorcycles or motor-driven cycles, if a motorcycle or motor-driven cycle would be added to the policy, whether by substitution, replacement, or otherwise; or,

(B) for an insurer that does not insure four-wheeled private passenger automobiles, if a four-wheeled private passenger automobile would be added to the policy, whether by substitution, replacement or otherwise;

(9) except as provided for in subpart (b), change in the use of the vehicle.

(b) For the purpose of cancellation or nonrenewal pursuant to Insurance Code Section 1861.03(c), the following events or characteristics shall constitute a substantial increase in the hazard insured against:

(1) the refusal or failure by the insured to provide to the insurer, within 30 days after reasonable written request to the insured, information necessary to accurately underwrite or classify the risk. Every written request for information to an insured shall contain a prominent notice, in both English and Spanish, advising the insured that the insured's failure to provide the requested information within the time required may result in the cancellation or nonrenewal of the insured's policy;

(2) permissive use of the insured vehicle by persons other than the insured and principal or occasional drivers of the insured vehicle, to an extent that indicates regular use of the vehicle by such persons;

(3) the failure of the insured vehicle to comply with California or federal safety requirements if such failure is not removed prior to the time that the insurer's nonrenewal or cancellation of the policy becomes effective;

(4) the alteration of the insured vehicle in order to increase speed or acceleration capabilities which renders the insured vehicle unsafe in violation of California Vehicle Code Section 24002;

(5) suspension of the license of the insured if such suspension is not removed prior to the time that the insurer's nonrenewal or cancellation of the policy becomes effective. Notwithstanding the foregoing, a suspension shall not be grounds for cancellation or nonrenewal if it is based on the insurer's failure to make a filing required by the California Insurance or Vehicle Codes, and if a request for such a filing was made by the insured;

(6) revocation of the license of the insured for any reason other than an insurer's failure to make a filing required by the California Insurance Code.

(7) expiration of the license of the insured if the insured has not obtained a valid license prior to the time that the insurer's nonrenewal or cancellation of the policy becomes effective.

(8) change in the use of the insured vehicle to commercial use, if such a change in use is prohibited under the terms of the policy of insurance or binder issued to the policyholder.

(9) a conviction of any alcohol-related offense specified in Sections 23152; 23153; 23220; 23221; 23222; 23224; or 23226 of the California Vehicle Code, provided the person does not otherwise qualify to purchase a good driver discount policy pursuant to Section 1861.025.

(c) For the purpose of nonrenewal pursuant to Insurance Code Section 1861.03(c), the following circumstances shall constitute a substantial increase in the hazard insured against:

(1)

(A) the insured or principal or occasional driver of the insured vehicle has been assessed a total of three or more violation points under Section 2632.13.1 within the preceding 36 months. For the purpose of this subpart, traffic violation points may be counted only for violations that have conviction dates not more than 36 months preceding the renewal date of the policy; and

(B) at the time of the expiration of the insured's current policy, the insured is not eligible under the insurer's then-current underwriting rules to purchase a policy of private passenger automobile insurance from the insurer;

(2) the assessment of two points by the insurer under Section 2632.13.1 for the insured or any principal or occasional driver of the insured vehicle, as a result of a violation of the California Vehicle Code for which two points are assessed under California Vehicle Code Section 12810. For the purpose of this subpart, traffic violation points may be counted only for violations that have conviction dates not more than 36 months preceding the renewal date of the policy.

(d) For the purpose of Subsection (c)(1) only, an insurer may count two violation points for each accident in which, in accordance with Section 2632.13, the insured or any principal or occasional driver of the insured vehicle was determined to be principally at fault and which resulted in bodily injury or in the death of any person. In bodily injury accidents not resulting in death, the total loss or damage caused by the accident must exceed $500.00.

(e) Notwithstanding any other provision of this Section, an insurer may not consider there to be a substantial increase in the hazard insured against unless part of the circumstances which constitute the substantial increase in the hazard insured against occurred after the most recent issuance or renewal of the policy, or unless part of the circumstances which constitute the substantial increase in hazard meet the following criteria:

(1) the circumstance is a traffic violation conviction that,

(A) did not appear on the public record of traffic violation convictions available from the California Department of Motor Vehicles, or did not appear on the public records of other jurisdictions, for which violation points would be counted under Section 2632.13.1; and,

(B) the insurer obtained the public record not more than 75 days before the most recent renewal or effective date of the policy; and,

(C) the insurer had no notice of the traffic violation conviction when the most recent offer of insurance or renewal was made; or,

(2) the circumstance occurred during the 60 days preceding the most recent renewal or effective date of the policy, and the insurer had no notice thereof.

(f) Notwithstanding any other provision of this Section, if a substantial increase in the hazard insured against exists because of the violation points or circumstances of any person other than the insured, then a substantial increase in the hazard insured against shall not exist if the insured excludes such other person from coverage.

Cal. Code Regs. Tit. 10, § 2632.19

1. New section filed 12-2-93; operative 1-3-94 (Register 93, No. 49).
2. Amendment of subsections (a)(2), (a)(8)(B) and (b)(4), new subsection (b)(6), subsection renumbering, and amendment of subsections (c)(1)(A)-(C), (d) and (e)(1)(A) filed 10-5-98; operative 11-4-98 (Register 98, No. 41).
3. Amendment of subsection (b)(3), new subsection (b)(4), subsection renumbering, new subsection (b)(9), repealer of subsection (c)(1)(A), subsection relettering, amendment of newly designated subsection (c)(1)(A), and amendment of subsection (c)(2) filed 10-5-98; operative 11-4-98 (Register 98, No. 41).
4. Change without regulatory effect amending subsections (c)(1)(A), (c)(2) and (e)(1)(A) filed 5-13-2013 pursuant to section 100, title 1, California Code of Regulations (Register 2013, No. 20).
5. Change without regulatory effect amending subsection (b)(1) filed 7-14-2021 pursuant to section 100, title 1, California Code of Regulations (Register 2021, No. 29). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20.

Note: Authority cited: Sections 1861.03, 12921 and 12926 of the California Insurance Code. Reference: Section 1861.03 of the California Insurance Code.