Which of the following is NOT a reason an insurer can cancel a policy?

The correct answer is that excessive claims is not a recognized reason for an insurer to cancel a policy. In many jurisdictions, insurers are required to uphold policies unless there are specific breaches of contract or violations of the terms that justify cancellation.

While non-payment of premium and non-payment of sickness and accident insurance are valid grounds for cancellation because they represent a failure to fulfill the financial obligations outlined in the policy, excessive claims do not constitute a breach of the policyholder’s contract. Policyholders are entitled to benefit from the coverage they pay for, and making several claims, assuming they are valid and within the terms of the policy, should not lead to cancellation.

Insurance fraud is indeed a legitimate reason for cancellation because it involves dishonesty and misrepresentation, which violate the trust foundational to the insurance contract. Overall, the other options indicate direct failures to meet policy obligations or unethical behavior, whereas excessive claims may simply reflect a policyholder utilizing their benefits.