Delaware Code
Chapter 48. INSURANCE PREMIUM FINANCING
§ 4809. Cancellation of insurance contract upon default.

(a) When in connection with a premium finance agreement, a power of attorney or other authority to cancel any insurance contract or contracts on behalf of the insured is given to a premium finance company, such insurance contract or contracts may not be cancelled by the premium finance company unless such cancellation is effectuated in accordance with this section; provided, however, that cancellation of automobile casualty insurance contracts pursuant to this section may be made only in a manner which is consistent with Chapter 39 of this title and the method of such cancellation shall be consistent with the time periods and be subject to the rights of reinstatement provided in that chapter for cancellation on the basis of nonpayment of premium.
(b) Not less than 10 days' written notice shall be mailed to the insured at the insured's last known address of the intent of the premium finance company to cancel the insurance contract unless a default is cured within such 10-day period.
(c) After the expiration of such 10-day period, the premium finance company may thereafter cancel in the name of the insured such insurance contract or contracts by mailing to the insurer a notice of cancellation, and the insurance contract shall be cancelled as if notice of cancellation had been submitted by the insured but without requiring the return of the insurance contract or contracts. The premium finance company shall also mail notice of cancellation to the insured at the insured's last known address.
(d) No policy may be cancelled by a premium finance company solely because of nonpayment of a delinquency or collection charge provided for in this chapter.
(e) All statutory, regulatory and contractual restrictions providing that the insurance contract may not be cancelled unless notice is given to a government agency, mortgagee or other third party shall apply where cancellation is effected under this section. The insurer, in accordance with the said prescribed notice, any time it is required to give such notice on behalf of itself or the insured, shall give notice to such governmental agency, mortgagee or other person before the end of the second business day after the day it receives the notice of cancellation from the premium finance company and shall determine the effective date of cancellation, taking into consideration the number of days' notice required to complete the cancellation.
(f) Whenever an insurance contract is cancelled in accordance with this section, the insurer shall return whatever gross unearned premiums are due under the contract to the premium finance company effecting the cancellation for the account of the insured or insureds as soon as reasonably possible, but in no event shall the period for such payment exceed 90 days after the effective date of the cancellation.

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