SECTION 5.7005. Special One-Year Rule Applicable Only to Personal Automobile Policies

(a) Purpose of rule. It is the purpose of this special section to provide continuity of coverage for a period of at least one year when the policy is written for a lesser term. Its purpose is also to permit cancellation at the expiration of a one-year term when coverage is written to cover a period of more than one year.

(b) Cancellation. A company may cancel personal automobile policies irrespective of the reasons which prompt it to do so, if the purpose is to terminate coverage concurrently with the expiration of any annual period, beginning with the original effective date of the policy. The prohibition contained in §5.7002 of this title (relating to Cancellations) is inapplicable to such cancellations. It is especially provided, however, that a company which cancels on the anniversary, and in accordance with the provisions of this subsection must give the policyholder at least 30 days prior written notice of cancellation.

(c) Personal automobile policies which are written for a period of less than one year must be renewed, at the option of the insured, for additional periods so as to accumulate a minimum of 12 months' continuous coverage.

Source Note: The provisions of this §5.7005 adopted to be effective January 1, 1976; amended to be effective May 3, 1983, 8 TexReg 1295.