Policy Cancellation Checklist

Open the policy in Applied Epic, AMS360, or EZLynx. Confirm the policy number, named insured, mailing address, and any additional named insureds match what the requester provided. Mailing address mismatches are the top cause of returned cancellation notices.

Note whether this is admitted or surplus-lines (E&S), occurrence vs claims-made, and whether tail coverage will be needed. Claims-made policies cancelling without an ERP create a coverage gap on prior acts the insured may not realize until a late-reported claim.

Notice windows vary by state and by reason for cancellation. NY requires 45–60 days for non-renewal of most P&C; CA requires 45 days for personal auto; FL requires 45–120 days depending on line. Mid-term cancellation for non-payment typically has shorter windows (often 10 days). Missing the window forces continuation at expiring terms.

Insured-requested cancellations are typically short-rate (penalty applied); carrier-initiated cancellations are pro-rata. Confirm the calculation basis in the policy's cancellation provision before quoting a refund figure to the insured.

If the policy is premium-financed, the return premium is owed to the finance company first, not the insured. Mortgagee-billed policies route the refund through escrow. Pulling refunds direct to the insured on a financed policy creates a chargeback dispute.

Most carriers require a Lost Policy Release (LPR) or carrier-specific cancellation form signed by the named insured. Verbal or email-only cancellation requests are generally not honored — get the wet or DocuSign signature.

Document the conversation: lapse in coverage exposes the insured to uncovered claims and may trigger lender, lessor, or state-mandated coverage requirements. For commercial insureds, COIs issued to certificate holders will need to be cancelled or reissued against the new policy.

Upload the signed LPR through the carrier portal or email the underwriter per the carrier's documented cancellation procedure. Capture the carrier's confirmation number — this is the audit trail if the policy still shows in-force at a later date.

Screen the named insured and any payee against the OFAC SDN list at the time of refund payment, not just at issuance. Names can be added to the list mid-policy; refunding without re-screening creates an OFAC violation.

Set the policy to cancelled with the effective date confirmed by the carrier. Stop any scheduled installments, reverse any unposted commissions, and remove the policy from active renewal queues.

Route refund to premium finance company, mortgagee, or insured per the billing arrangement. For carrier direct-bill policies, confirm the refund is being issued by the carrier and not duplicated by the agency.

Confirmation should restate the effective date of cancellation, the refund amount and recipient, and any tail or ERP options for claims-made policies. Use the agency's standard letter template to ensure consistent state-required disclosure language.

For E&S policies, return premium triggers a tax adjustment with the state's stamping office or DOI within the state's filing window (typically 30–60 days). The wholesale broker often handles this, but confirm — compliance rests with the producer of record.

Most states require 5–7 years of policy file retention; workers comp can require 10+ years given lifetime medical exposure. Tag the file with the retention date in ImageRight; premature destruction creates spoliation risk on a late-reported claim.