What might trigger the insurer's right to cancel a policy?

The insurer's right to cancel a policy is often triggered by an insured's breach of the policy terms. Insurance contracts are based on the principle of utmost good faith (uberrimae fidei), where both parties must act honestly and disclose relevant information. If the insured fails to adhere to the terms outlined in the policy—whether through providing false information, failing to pay premiums, or engaging in risky behavior that violates the agreement—this breach can provide valid grounds for the insurer to cancel the policy.

For instance, if an insured person experiences a significant change in their health status or participates in activities that are explicitly prohibited in the policy, the insurer might exercise its right to cancel due to the violation of the agreed-upon terms. This maintains the integrity of the insurance agreement and protects the insurer from undue risk.

In contrast, while an increase in the insured's health risks could potentially concern the insurer, it typically does not directly warrant policy cancellation unless it results from behavior contrary to the policy's requirements. A change to a less hazardous job is unlikely to trigger cancellation as it presents a reduced risk for the insurer. Normal fluctuations in claims are part of the business and do not generally affect the insurer's rights concerning policy cancellation.