A. In motor vehicle insurance policies there shall be a provision that the policyholder is entitled to a minimum grace period of seven days for the payment of any premium due except the first payment, during which grace period the policy shall continue in full force. For the purposes of this subsection, an initial payment on the renewal of a policy is not a first payment of premium.
Terms Used In Arizona Laws 20-1632.01
B. For any motor vehicle insurance policy cancelled or nonrenewed for nonpayment of premium by the insurer after the grace period, the insurer must mail a notice of cancellation or nonrenewal to the policyholder at the policyholder’s last address on record with the insurer by first class mail. The cancellation or nonrenewal is effective on the date the notice is mailed to the policyholder. The notice shall include or be accompanied by a statement in writing of the reasons for such action by the insurer and a notice indicating the named insured’s right to complain to the director of the insurer’s action within ten days after receipt of the notice by the insured. An insurer shall not cancel or nonrenew a motor vehicle insurance policy pursuant to this section because of the named insured’s location of residence, age, race, color, religion, sex, sexual orientation, marital status, national origin, ancestry or driving record.
C. This section does not apply to policies being cancelled pursuant to section 6-1415. The grace period provided in such policies shall be satisfied by the ten day notice of intent of the premium finance company to cancel the insurance contract unless the default is cured within the ten day period.
D. For the purposes of this section, “grace period” means the period of time after the premium due date during which the policy remains in force without penalty even though the premium due has not been paid.