Glossary

Cancellation

The ending of a policy before its expiration date, either by the homeowner at any time or by the insurer for reasons the policy and state law allow.

Also called: policy cancellation, cancellation notice, mid-term cancellation

Cancellation ends a policy before its expiration date. You can cancel at any time by notifying the insurer, usually in writing. Your refund of unearned premium is calculated pro rata, meaning in proportion to the days left, though some insurers use a short-rate table that keeps a penalty when the policyholder cancels early.

The insurer's right to cancel is narrower. The standard ISO form allows cancellation for nonpayment on at least 10 days' notice, for any reason during the first 60 days of a new policy on 10 days' notice, and after that only for reasons such as material misrepresentation or a substantial change in the risk, with 30 days' notice. State law and amendatory endorsements often lengthen these periods and limit the grounds, so your policy and state rules decide.

Cancellation differs from nonrenewal, which takes effect at the end of the term. The mortgagee named on your declarations page normally receives notice too, and if coverage lapses the lender can buy force-placed insurance and bill you.

Never cancel until the replacement policy is in force, and get proof of the new coverage first. For an overdue premium, ask about reinstatement before the cancellation date. See our guides on canceling a policy and getting a refund and nonrenewal vs cancellation of homeowners insurance: your rights for state-by-state differences in your rights.

Last reviewed October 10, 2026

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Related terms

Nonrenewal An insurer's decision to end coverage at the end of the policy period by declining to offer another term, as opposed to ending it partway through. Renewal The insurer's continuation of your policy for another term, usually with a new premium and sometimes with changed deductibles, limits or conditions. Policy period The span between a policy's effective date and expiration date, usually 12 months, during which a loss must occur to be covered. Pro rata cancellation A cancellation method that refunds the unused part of the premium in exact proportion to the days remaining, with no penalty deducted. Short-rate cancellation A cancellation method that returns less than the full unused premium when you end a policy early, so the insurer keeps a penalty on top of what it earned. Reinstatement Putting a canceled or lapsed policy back in force after you pay what is owed and the insurer agrees, with or without a gap in coverage.

Related guides

How to cancel homeowners insurance and get a refund Cancel in writing with a date, tell your lender, and expect the unused premium back pro rata unless a short-rate rule applies. Steps, deadlines, late refunds. Cancellation for nonpayment and reinstatement The standard ISO form allows cancellation for unpaid premium on 10 days' notice. Notice rules, payment timing and reinstatement decide whether you get a gap. Divorce and the homeowners policy After a separation, a spouse who moves out can lose insured status while still on the deed. How to keep the house covered, retitle the policy and avoid a gap. Force-placed (lender-placed) insurance explained What force-placed insurance covers, the notices Regulation X requires before a servicer charges you, and how to get it cancelled and refunded. Insurance inspections after you buy a policy Why insurers inspect a house after binding, what they look for, how the first 60 days work under the ISO form and state law, and what to do if a report is bad. Disaster moratoriums on cancellations and nonrenewals After a declared disaster some states bar insurers from dropping homes for a set period. What it covers, how long it lasts and what it does not stop.