424.304 Cancellation by customer.

(1) Following the sale of any insurance product under s. 422.202 (1) (b), the customer has the right to cancel the insurance until 30 days after the policy is mailed or otherwise delivered to the customer. The creditor shall provide the customer a notice in duplicate in the form set forth in subs. (2) and (3).

(2) The notice required by sub. (1) shall be in substantially the following form:

CUSTOMER'S RIGHT TO SUBSTITUTE PROPERTY OR LIABILITY INSURANCE

You may cancel the property or liability insurance which you purchased through .... (name and address of lender) to insure the collateral securing your loan dated .... (date). To cancel, you must mail or deliver a written notice, together with the original policy for the property or liability insurance, to us before midnight of the 30th day after the date our policy was mailed or otherwise delivered to you. In addition, you must include a copy of a policy or endorsement for substitute insurance from another insurance company, such as the company insuring your home, that provides the same coverage and that names our company as loss payee. If you cancel and you do not provide evidence of substitute insurance to us with your notice or within 7 days after sending a cancellation notice to us, we may purchase other insurance to cover our risk and charge you for it.

If you wish, you may use this page as your written notice by writing “I hereby cancel this insurance" and adding your name, address and the date. This page, the original policy and a copy of the substitute policy or endorsement showing our company as loss payee must be sent or delivered to us before midnight on the 30th day after the date our policy was mailed or otherwise delivered to you. Keep the copy of this page for your records.

If you cancel this insurance, you may elect to receive either a check for the insurance premiums or a credit against your loan balance in the amount of the insurance premiums and the amount of applicable finance charge. Check which of the following you elect:

1. .... I want you to send me a check in the amount of $.... (amount of insurance premiums) for the insurance premiums.

2. .... I want you to credit my loan balance in the amount of $.... (amount of insurance premiums) which is the amount of the insurance premiums, plus the amount of applicable finance charge.

(3) A creditor may elect to provide only a credit to a customer who cancels insurance under this section. If a creditor so elects, the creditor shall delete the last paragraph of the notice under sub. (2) and shall substitute the following: “If you cancel this insurance, we will credit your loan balance in the amount of $.... (amount of insurance premiums), which is the amount of the insurance premiums, plus the amount of applicable finance charge."

(4) Any customer who cancels and substitutes insurance within the 30-day period under sub. (1) is entitled to a credit or payment under s. 424.402. Any insurance policy covered by the notice shall be void as of the date of purchase, unless a loss has occurred, upon mailing or delivery of the notice of cancellation by the customer and all rights under the policy shall terminate. The creditor shall promptly provide the customer with a credit or payment, as applicable, even if the original policy does not accompany the notice of cancellation.

(5) A violation of this section is subject to s. 425.303.

History: 1985 a. 256.