Michigan Compiled Laws

Mich. Comp. Laws § 500.1511 (2026)

Premium finance agreement; cancellation of insurance, procedure, notice, refund.

✓ current as of July 2026

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THE INSURANCE CODE OF 1956

Act 218 of 1956

500.1511 Premium finance agreement; cancellation of insurance, procedure, notice, refund.

Sec. 1511.

(1) When a premium finance agreement empowers the premium finance company to cancel any insurance contract or contracts listed in the agreement, the insurance contract or contracts shall not be canceled by the premium finance company unless such cancellation is effectuated in accordance with this section.

(2) Not less than 10 days' written notice shall be mailed to the insured of the intent of the premium finance company to cancel the insurance contract unless the default is cured within the 10-day period.

(3) After expiration of the 10-day period, the premium finance company may request cancellation of the insurance contract by mailing to the insurer a notice of cancellation, and the insurance contract shall be cancelled by the insurer without requiring the return of the insurance contract. The premium finance company shall also mail a notice of cancellation to the insured at his last known address at the same time the premium finance company requests cancellation of the insurance contract.

(4) All statutory, regulatory and contractual restrictions providing that the insurance contract may not be canceled unless notice is given to a governmental agency, mortgagee or other third party shall apply where cancellation is effected under the provisions of this section. The insurer shall give the prescribed notice in behalf of itself or the insured to any governmental agency, mortgagee or other third party on or before 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.

(5) Whenever a financed contract is canceled, the insurer shall return whatever gross unearned premiums are due under the insurance contract to the premium finance company for the account of the insured.

(6) If the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium finance company shall refund the excess to the insured, but no refund shall be required if it amounts to less than $1.00.

History: Add. 1968, Act 352, Eff. Nov. 15, 1968

PopularName Notes:

Act 218

Notes of Decisions

Cited in 5 cases, 1978–2009 · leading case: Farmers Ins. Grp. v. Progressive Cas. Ins., 269 N.W.2d 647 (Mich. Ct. App. 1978).

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Farmers Ins. Grp. v. Progressive Cas. Ins., 269 N.W.2d 647 (Mich. Ct. App. 1978). · cites it 3× “At that hearing, defense counsel drew the court’s attention to MCL 500.1511; MSA 24.11511, pertaining to cancellations by a premium finance company.”

Maher v. Northland Ins., 991 F. Supp. 878 (E.D. Mich. 1998). · cites it 19× “The financing agreement contained a cancellation provision that provided: CANCELLATION OF POLICIES: Ins-ta-Prem may cancel above policies in accordance with [Mich.Comp.Laws § 500.1511] if any installment or late *880 charges are not paid by 21 days after due date.”

St. James Inc. v. Cananwill, Inc. (In Re St. James Inc.), 402 B.R. 209 (Bankr. E.D. Mich. 2009). · cites it 3× “Mich. Comp. Laws § 500.1511 (5)-(6)(em-phasis added).”

Curtis v. Progressive Cas. Ins., 760 F.2d 114 (6th Cir. 1985). “The court held further that notification of cancellation by the bank was not required because banks are exempt from the notice requirements of Mich.Comp.Laws Ann. § 500.1511, Mich. StatAnn.”

Doshi v. Michigan Basic Prop. Ins., 582 N.W.2d 542 (Mich. Ct. App. 1998). · cites it 2× “Cancellation of an insurance contract by a premium finance company may be effectuated in the manner set forth in MCL 500.1511; MSA 24.11511, which provides in pertinent part: (1) When a premium finance agreement empowers the premium finance company to cancel any insurance…”

— Mich. Comp. Laws § 500.1511(3) — 1 case

Maher v. Northland Ins., 991 F. Supp. 878 (E.D. Mich. 1998). “The financing agreement contained a cancellation provision that provided: CANCELLATION OF POLICIES: Ins-ta-Prem may cancel above policies in accordance with [Mich.Comp.Laws § 500.1511] if any installment or late *880 charges are not paid by 21 days after due date.”

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