California Personal Lines Study Guide

Personal lines questions in California cluster around a single theme: when an insurer may walk away from a policyholder, and how much warning it owes. This is the part of the Insurance Code California has legislated hardest, especially after the wildfire years, and every notice period below is a separate number the exam will play off against the others.

The sixty-day window — broader rights at the start

A new policy is not immediately locked in. During roughly the first 60 days a policy is in force, the insurer has broader cancellation rights; after that, cancellation is limited to enumerated grounds (§ 662). That window is the frame for everything else here — a question that tells you how long the policy has been in force is telling you which set of rules applies.

Inside it, the auto cancellation notice is at least 20 days — or 10 days if the policy has been in effect less than 60 days.

The notice periods, side by side

• Cancellation for nonpayment — 10 days (§ 662)
• Cancellation for other permitted causes, auto — 20 days (§ 662)
• Cancellation of an auto policy in force under 60 days — 10 days (§ 662)
• Nonrenewal, auto — at least 30 days before expiration (§ 663)
• Nonrenewal, residential property — at least 60 and not more than 120 days before expiration (§ 678)

Must the insurer say why?

Here California splits the two lines, and this is where candidates who learned one rule lose both marks.

For residential property, the reasons must be stated in the nonrenewal notice — proactively, without being asked (§ 678). For auto, the reason is furnished on the insured’s request (§ 666).

Note also that residential property nonrenewal is the only one with a maximum as well as a minimum. A notice sent 150 days before expiration is not helpfully early; it is defective.

The wildfire moratorium — California’s signature protection

No other state has anything quite like it. Under § 675.1, added by SB 824 (2018), a mandatory one-year moratorium applies after a declared wildfire disaster: an insurer may not cancel or nonrenew residential property insurance for one year for policyholders living within or adjacent to the fire perimeter.

Two details do the work in exam questions. The protection is automatic — triggered by the declaration, not by an application from the policyholder. And it reaches homes adjacent to the perimeter, not only those inside it. Expect a fact pattern in which the house never burned and the insurer tries to nonrenew anyway; that is the whole point of the rule.

When coverage genuinely cannot be found in the standard market, the California FAIR Plan Association is the insurer of last resort for basic property and fire coverage.