What must an insurer provide to the named insured when deciding to nonrenew a policy?

When an insurer decides to nonrenew a policy, it is required to provide a written notice to the named insured that clearly states the reasons for the nonrenewal. This written communication is essential for several reasons. Firstly, it ensures transparency in the insurer's decision-making process, allowing the policyholder to understand why their coverage is being discontinued. This practice not only helps maintain trust between the insurer and insured but also enables the insured to take appropriate action, whether it be seeking alternative coverage or addressing any issues that may lead to a nonrenewal.

In contrast, while a verbal explanation could provide information, it lacks the formality and documentation required to ensure that the insured has a clear and permanent record of the reasons behind the insurer's actions. A summary of the policy’s coverage does not pertain directly to the nonrenewal decision and would not serve the necessary purpose of informing the insured about the forthcoming change. Lastly, while providing an option to appeal might seem supportive, it is not a standard requirement for nonrenewal; the key requirement is the written notice stating the reasons for the decision.