1.    No insurer may cancel a policy except for the following reasons:

a.    Nonpayment of premium.

b.    Because the motor vehicle operator’s license or motor vehicle registration of either the named insured or any other operator who resides in the same household as the named insured or who customarily operates a motor vehicle insured under the policy has been suspended, rescinded, canceled, or revoked during the policy period, or, if the policy is a renewal, during its policy period or for one hundred eighty days immediately preceding its effective date. This subdivision does not apply and the insurer may not cancel a policy when the operator whose license is suspended or revoked is excluded from coverage under the policy. The insurer shall notify the named insured of the possibility of excluding an operator whose license has been suspended or revoked prior to cancellation of the policy. When an operator whose license is suspended or revoked is excluded from coverage under the policy covering a secured motor vehicle, the owner of the motor vehicle who gives expressed or implied consent to the operator to use the motor vehicle is not relieved of liability under subsection 5 of section 26.1-41-02.

c.    Fraud or material misrepresentation made by or with the knowledge of any insured in obtaining the policy, continuing the policy, or in presenting a claim under the policy.

d.    The insured motor vehicle is:

(1) So mechanically defective that its operation might endanger public safety; (2) Used in carrying passengers for hire or compensation; provided, however, that the use of an automobile for a car pool is not use of an automobile for hire or compensation; (3) Used in the transportation of flammables or explosives or for an illegal purpose; (4) An authorized emergency vehicle; or

(5) Altered by an insured during the policy period so as to substantially increase the risk.

e.    The named insured moves to a state where the insurer is not licensed to do business.

f.    Failure to pay dues or fees when payment of the dues or fees is a prerequisite to obtaining or continuing automobile insurance coverage.

g.    A determination by the commissioner that the continuation of the policy would place the insurer in violation of the law or would be hazardous to the interests of policyholders, creditors, or the public.

2.    During the policy period no modification of automobile physical damage coverage, except coverage for loss caused by collision, by which provision is made for the application of a deductible amount not exceeding one hundred dollars is deemed a cancellation of the coverage or of the policy.

3.    Renewal of a policy does not constitute a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of the renewal.