Texas Property and Casualty License Practice Exam 2025 – All-in-One Guide to Exam Success!

In the context of insurance policies, the insurer has specific rights regarding the cancellation of a policy due to non-payment. When the insurer issues a notice of cancellation, they typically provide a grace period for the policyholder to make the required payment. In Texas, under the insurance code, if an insurer gives a 10-day notice of cancellation due to non-payment of premium, they are allowed to cancel the policy 30 days after the due premium date if the premium is still unpaid.

This is important because it provides policyholders a brief period to rectify their non-payment situation after receiving the cancellation notice. It is a consumer protection provision, acknowledging that sometimes, payments may fall through the cracks, and policyholders should have a chance to settle their payments before losing coverage.

Thus, the key to understanding this question is recognizing that the 30-day timeframe aligns with the insurer's obligation to provide notice and grace for payment before proceeding with the cancellation. The choice indicating 60 days does not align with the statutory requirements for cancellation due to non-payment in Texas.