(a) An insurer may cancel a personal automobile policy if it has been in effect for more than 59 days for only the following reasons:
  (1) the failure of the insured to discharge his or her obligation in the payment of premium for the policy or any installment thereof, whether payable directly to the company or its agent or indirectly under any premium finance plan or extension of credit;
  (2) the suspension or revocation of the driver's license or motor vehicle registration of the named insured or of any other operator who either resides in the same household or customarily operates an automobile insured under the policy. Provided, however, a company may not cancel if the policyholder consents to the attachment of an endorsement eliminating coverage when the driver whose license is suspended or revoked is operating the vehicle;
  (3) the department determines that the continuation of the policy would violate or place the company in violation of the Insurance Code or any other law governing the business of insurance in this state; or
  (4) the insured submits a fraudulent claim.
(b) An insurer may cancel a homeowners insurance policy if it has been in effect for more than 59 days for only the reasons provided under subsection (c) of this section. An insurer may cancel any of the following policies that have been in effect for more than 89 days for only the reasons provided under subsection (c) of this section:
  (1) farm or ranch owners policies;
  (2) standard fire policies insuring:
    (A) a one-family dwelling or a duplex; or
    (B) the contents of a one-family dwelling, a duplex, or an apartment; or
  (3) insurance policies providing property and casualty coverage, other than a fidelity, surety, or guaranty bond, to:
    (A) this state;
    (B) an agency of this state;
    (C) a political subdivision of this state, including:
      (i) a municipality or county;
      (ii) a school district or junior college district;
      (iii) a levee improvement district, drainage district, or irrigation district;
      (iv) a water improvement district, water control and improvement district, or water control and preservation district;
      (v) a freshwater supply district;
      (vi) a navigation district;
      (vii) a conservation and reclamation district;
      (viii) a soil conservation district;
      (ix) a communication district;
      (x) a river authority; and
      (xi) councils and courts; or
    (D) any other governmental agency whose authority derives from the laws and constitution of this state.
(c) An insurer may cancel any of the policies under subsection (b) of this section for only the following reasons:
  (1) the failure of the insured to discharge his or her obligation in the payment of premium for the policy or any installment thereof, whether payable directly to the company or its agent or indirectly under any premium finance plan or extension of credit;
  (2) increase in hazard within the control of the insured which would produce an increase in the premium rate of the policy;
  (3) the department determines that the continuation of the policy would violate or place the company in violation of the Insurance Code or any other law governing the business of insurance in this state; or
  (4) the insured submits a fraudulent claim.
(d) An insurer may not date or send the notice of cancellation for nonpayment of premium until after the premium due date.

Source Note: The provisions of this §5.7002 adopted to be effective January 1, 1976; amended to be effective May 3, 1983, 8 TexReg 1295; amended to be effective October 9, 2012, 37 TexReg 8034