What principle ensures that an insured's coverage remains consistent when switching policies?

What principle ensures that an insured's coverage remains consistent when switching policies?

• A. Review of Need
• B. Continuity of coverage
• C. Claims satisfaction
• D. Policy endorsement

Answer: (B)

The principle that ensures an insured's coverage remains consistent when switching policies is known as continuity of coverage. This principle is crucial because it allows individuals to change their insurance policies or providers without losing the protection they currently have. When continuity of coverage is maintained, the new policy will provide equivalent or similar coverage to the previous one, addressing potential gaps in risk protection that could arise during the transition. This principle is particularly important in scenarios such as changing auto insurance providers or moving from one health insurance plan to another. It ensures that there is no lapse in coverage that might expose the insured to unforeseen losses or liabilities during the changeover. The other options do not directly address the issue of ensuring consistent coverage. For example, a review of need focuses on assessing one’s insurance needs periodically, while claims satisfaction relates to the insured's experience when making a claim. Policy endorsement refers to amendments made to an existing policy, which does not inherently ensure continuity during a switch. Therefore, continuity of coverage stands out as the correct and specific principle related to maintaining consistent insurance protection during policy changes.

The principle that ensures an insured's coverage remains consistent when switching policies is known as continuity of coverage. This principle is crucial because it allows individuals to change their insurance policies or providers without losing the protection they currently have. When continuity of coverage is maintained, the new policy will provide equivalent or similar coverage to the previous one, addressing potential gaps in risk protection that could arise during the transition.

This principle is particularly important in scenarios such as changing auto insurance providers or moving from one health insurance plan to another. It ensures that there is no lapse in coverage that might expose the insured to unforeseen losses or liabilities during the changeover.

The other options do not directly address the issue of ensuring consistent coverage. For example, a review of need focuses on assessing one’s insurance needs periodically, while claims satisfaction relates to the insured's experience when making a claim. Policy endorsement refers to amendments made to an existing policy, which does not inherently ensure continuity during a switch. Therefore, continuity of coverage stands out as the correct and specific principle related to maintaining consistent insurance protection during policy changes.