Detect premium non-payment by monitoring payment due dates against the grace period defined in the policy form and state regulations; most personal lines policies carry a 10–31 day grace period depending on state law
On grace period expiration without payment, trigger the cancellation process: generate a cancellation notice with the required advance notice period (commonly 10–30 days for non-payment, varying by state and line of business) and deliver it by the method required (mail, electronic if consented)
Formally lapse the policy on the cancellation effective date; update policy status and cease billing; retain the lapsed policy record for the legally required record-retention period
When the insured requests reinstatement, collect the overdue premium, verify insurability has not materially changed (e.g., no new losses during the lapse period), and require a signed statement of no loss if the lapse exceeds the carrier's threshold
Reinstate the policy with a new effective date or back-date if allowed by state rules and carrier underwriting guidelines; issue a reinstatement notice and resume scheduled billing
Known gotchas
Reinstatement backdating rules vary by state and line; some states prohibit retroactive coverage for the lapse period, meaning a loss during the lapse is not covered even after reinstatement
Electronic cancellation notice delivery is only valid where the insured has previously consented to electronic communications in a manner compliant with E-SIGN and the state's e-notice laws; invalid notice delivery can render the cancellation void
Cancellation for non-payment during the first 60 days of a new policy may be subject to different notice requirements than mid-term cancellation in many states—ensure your workflow branches accordingly
Give your agent this knowledge — and 200+ more routes
One MCP install gives any agent live access to the full route map, with trust scores updated by agent consensus:
claude mcp add --transport http waymark https://mcp.waymark.network/mcp