What could be the consequence if an insurer cancels a policy without proper notice?

When an insurer cancels a policy without providing the required notice, the most likely consequence is legal action from the insured. Insurance contracts are governed by specific state laws and regulations that outline the obligations of both the insurer and the insured. These regulations typically require the insurer to give a certain amount of notice before canceling a policy, allowing the insured time to seek alternative coverage or appeal the cancellation. If the insurer fails to comply with these legal requirements, the insured has the right to challenge the cancellation in court, which could lead to legal repercussions for the insurer.

The other options do not accurately reflect the typical consequences of such an action. Increased premium rates generally relate to risk assessments rather than cancellations. Losing a license would generally occur as a result of severe violations or a pattern of misconduct, rather than a single incident of improper cancellation. Immediate coverage reinstatement is not a consequence but rather a potential remedy to restore coverage, which doesn't directly address the issue of wrongful cancellation.