Final answer:
An auto insurance policy can be canceled by the insurer if there's a failure to notify about an accident promptly or if there is a suspension of the license of the insured or a regular driver. Age alone (e.g., turning 76) is not typically a valid reason for cancellation by the insurer. The correct option is 1) the insured turns 76 (age)
Step-by-step explanation:
The question refers to the circumstances under which an insurer can cancel an auto insurance policy. Of the options given, cancellation of an auto policy by the insurer can occur due to: failure to notify the insurer of an accident in a timely fashion, or a suspension of the insured's license or someone who regularly drives the car. Insurers are in the business of assessing and managing risk, and a policyholder's failure to inform the insurer of an accident or having a suspended license can indicate higher risk. Notably, simply turning a certain age (such as 76) is generally not a valid reason for an insurer to cancel a policy as age alone does not immediately signify increased risk.
State insurance regulators sometimes intervene with legislation to keep premiums low, which can result in companies choosing not to do business in certain states if they feel they cannot adequately manage their risk exposure. Thus, insurers may cancel policies if they are unable to collect sufficient premiums to cover the risks they underwrite. However, age itself is an insufficient cause for policy cancellation, and there are often state-specific regulations in place that define the lawful reasons for policy cancellation. The correct option is 1) the insured turns 76 (age)