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Does an NSF Check Constitute Nonpayment?

An insured makes a payment by personal check on a policy that is scheduled to cancel for nonpayment. The check is received before the cancellation date and the company issues a reinstatement notice. Three weeks later, the insured and agent receive another cancellation notice stating that the policy is cancelled retroactively to the previous cancellation date because the check was returned "NSF" by the bank for "insufficient funds." Is this correct? For the answer and an important message about the value of your state association, keep reading....

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