Insurance Dwelling Policy Practice Test

The correct notice period required for cancellation within the first 60 days of a dwelling policy is 10 days. During this initial period, the insurer can cancel the policy with a relatively short notice because this timeframe allows them to reassess risks associated with the policyholder. A 10-day notice is deemed sufficient to inform the policyholder of the cancellation, enabling them to seek alternative coverage options if necessary.

This timeframe is standard in the insurance industry, recognizing that early policy cancellations often occur shortly after the beginning of the coverage period due to underwriting reconsiderations or inaccuracies discovered in the application process. Understanding this notice period is crucial for both policyholders and agents, as it outlines the insurer's obligations and the rights of the policyholder.