Question

84. If an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the changes will apply

(Choose from the following options)
1. Within 60 days.
2. Automatically.
3. When the new policy is written.
4. When the policy is up for renewal.

Answer 1

When an insurer broadens coverage in a dwelling policy during its term, changes apply automatically without the policyholder having to take any action or wait for renewal.

Step-by-step explanation:

If an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the changes will apply automatically. This means that the policyholder does not need to wait for the renewal of the policy or the issuance of a new policy for the expanded coverage to be effective.

When broadening coverage terms, insurers generally aim to make these benefits available to existing customers immediately without any action required on their part. Policy amendments that enhance coverage without additional premium provide immediate protection improvements according to the terms and conditions of the modified policy.