(a) Purpose of rule. It is the purpose of this special
section to provide continuity of coverage for a period of at least
one year when the policy is written for a lesser term. Its purpose
is also to permit cancellation at the expiration of a one-year term
when coverage is written to cover a period of more than one year.
(b) Cancellation. A company may cancel personal automobile
policies irrespective of the reasons which prompt it to do so, if
the purpose is to terminate coverage concurrently with the expiration
of any annual period, beginning with the original effective date of
the policy. The prohibition contained in §5.7002 of this title
(relating to Cancellations) is inapplicable to such cancellations.
It is especially provided, however, that a company which cancels
on the anniversary, and in accordance with the provisions of this
subsection must give the policyholder at least 30 days prior written
notice of cancellation.
(c) Personal automobile policies which are written
for a period of less than one year must be renewed, at the option
of the insured, for additional periods so as to accumulate a minimum
of 12 months' continuous coverage.
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