Missouri Personal Lines Study Guide

Personal lines in Missouri is mostly one question asked many ways: what may an insurer do to a household policy, and how much warning must it give? Missouri answers it across three statutory groups with different clocks, different grounds, and — the detail that catches people — slightly different lists of words an insurer may not use.

Two sixty-day windows that do different things

Both auto and habitational property have a sixty-day new-business window. They are not the same window.

On auto, the sixty days is built into the definition. RSMo 379.110(3) says “policy” means an automobile policy “which has been in effect for more than sixty days or has been renewed.” For the first sixty days, RSMo 379.110 to 379.120 do not apply at all — no restriction on grounds, and the notice sections do not bite.

On property, the sixty days attaches only to the grounds section. RSMo 375.002.2 provides that section “shall not apply to any policy or coverage which has been in effect less than sixty days at the time notice of cancellation is mailed or delivered by the insurer unless it is a renewal policy.” Inside the window the insurer is not confined to the four enumerated grounds — but the thirty-day notice at RSMo 375.003.1 is arguably still in force.

Both windows close on renewal, not merely at day sixty. The auto definition reaches a policy in effect more than sixty days “or has been renewed,” and the property carve-out ends “unless it is a renewal policy.” A six-month policy renewed at month three is inside the full regime from that date.

The two-ground auto list

After the window, RSMo 379.114.1 allows an auto insurer to cancel for exactly two reasons:

“(1) Nonpayment of premium; or (2) The driver’s license of the named insured has been under suspension or revocation at any time during the policy period.”

Ground (2) carries a condition inside it that is frequently missed. Where more than one person is named and only one is suspended, the statute says the policy “may not be cancelled, but the insurer may issue an exclusion providing, by name, that coverage will not be provided under the terms of the policy while such person is operating the insured vehicle during any period of suspension or revocation.” The remedy is prescribed, not offered as an alternative.

Property carries four grounds (RSMo 375.002.1): nonpayment; fraud, material misrepresentation or violation of policy terms; conviction of the named insured or any occupant of a crime arising out of acts increasing the hazard; and physical changes in the property increasing the hazards. Note the reach of the third — any occupant, not just the named insured — and that the fourth requires a physical change, so a purely underwriting-driven reappraisal is not a ground.

The clocks, the legend, and the envelope

Notice runs 30 days to cancel and 30 days to nonrenew on both auto and property, dropping to 10 days for nonpayment. Auto adds two more: 15 days’ notice that a policy is renewing, and 15 days for a reduction in coverage.

The ten-day nonpayment notice must carry, “in bold conspicuous type,” the legend beginning “THIS POLICY IS CANCELLED EFFECTIVE AT THE DATE AND TIME INDICATED IN THIS NOTICE. THIS IS THE FINAL NOTICE OF CANCELLATION WE WILL SEND…” That legend is a condition on the clock, not decoration.

Auto notices must also travel a prescribed way — “United States Postal Service certificate of mailing, first class mail using Intelligent Mail barcode (IMb), or another mail tracking method used, approved, or accepted by the United States Postal Service” (RSMo 379.118.1). Plain untracked first-class mail does not satisfy it.

“Reduction in coverage” has a defined meaning worth learning whole (RSMo 379.110(4)): a renewal change to a policy form, effective to all insureds with that form, removing coverage, diminishing scope or adding an exclusion — and “a reduction in coverage mandated by the insurer which does not apply to all insureds with the same policy form shall be treated as a nonrenewal.”

Say why, proactively — and mind which list applies

Missouri is a proactive-disclosure state. The insurer states the reason in the notice itself, in a formula that bans vagueness: “the statement of reason to be sufficiently clear and specific so that a person of average intelligence can identify the basis for the insurer’s decision without further inquiry. Generalized terms such as ‘personal habits’, ‘living conditions’, ‘poor morals’, or ‘violation or accident record’ shall not suffice” (RSMo 379.118.1(3)).

Two variations are testable. RSMo 375.004.1, property nonrenewal, bans only the first three terms — it omits “violation or accident record.” And the notice must carry the residual-market referral: the assigned risk plan on auto, or the “Missouri basic property insurance inspection and placement program” on property.

Eight accidents that may not raise a premium

20 CSR 500-2.600 makes a rating plan “unfairly discriminatory” where it surcharges for an accident in eight situations: the car was lawfully parked; the insured was reimbursed by or on behalf of a responsible person; the car was struck in the rear and the insured operator was not convicted of a moving violation; the other driver was convicted and the insured was not; a hit-and-run reported within twenty-four hours; contact with animals or fowl; flying gravel, missiles or falling objects; and an emergency response “to a call of duty.”

Learn the three conditions, not just the list — the rear-end item requires no conviction, the hit-and-run item requires the 24-hour report, and the emergency item requires a call of duty.

Separately, 20 CSR 500-2.700 bars surcharging uninsured motorist, comprehensive, or fire and theft premium on the insured’s driving record. Driving-record surcharges are confined to the coverages the record actually predicts.

Finally, credit. Missouri permits it in personal auto and personal property — mortgage and commercial policies are outside the definition — but never as the sole basis for adverse action, and never at renewal “until or after the third anniversary date of the initial contract” (RSMo 375.918.9), which RSMo 379.110(5) defines as three years after the date of the initial contract.