(1) (a) To cancel a vehicle value protection agreement, the provider must mail a written notice to the contract holder at the last-known address of the contract holder contained in the records of the provider at least five days prior to cancellation by the provider; except that the cancellation takes effect immediately upon the provider sending the notice to the contract holder if the reason for the cancellation is: (I) Nonpayment of any provider fee required to be paid by the contract holder; (II) A material misrepresentation by the contract holder to the provider; or (III) A substantial breach of duties by the contract holder relating to the covered vehicle or its use. (b) The notice must state the effective date of the cancellation and the reason for the cancellation. (2) (a) If a vehicle value protection agreement is canceled by the provider for a reason other than nonpayment of the provider fee, the provider shall refund to the contract holder, on a pro rata basis, any unearned provider fee paid by the contract holder; except that the provider may charge a reasonable administrative fee of up to seventy-five dollars. (b) If coverage under the vehicle value protection agreement continued after a benefit was paid under the agreement, the provider may deduct the amount of the benefit paid from the refund to the contract holder.
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