Suspension Of Coverage
Definition of "Suspension of coverage"
Interruption of insurance provided for in most property insurance policies under circumstances where a substantial increase in hazard has arisen with the knowledge or control of the insured. The policy's work and materials clause gives the insured the right to use materials and processes needed in his or her business without facing suspension from increased hazard. But major changes in the characteristics of the risk will trigger suspension of coverage. For example, a building used to warehouse dry goods when fire insurance first is written on it may be converted by the insured to store paint. The substantial increase in hazard results in suspension of coverage. Vacancy for more than 60 days and riot or explosion also result in suspension. Coverage is reinstated automatically for the remainder of the policy term when the condition that triggered suspension is corrected.
Popular Insurance Terms
Donation of amount "A," made by donor X to a charity. The charity agrees to pay donor X an amount ("B") for the rest of donor X's life. Since the donation is used to fund an annuity, only a ...
Technique used by insurance companies in the purchasing of debt obligations of corporations as a means to: (1) avoid the uncertainties of the market; (2) replace market negotiations with ...
Insurance policy that pays a face amount/ lump sum if the insured is diagnosed with a specified critical illness. This sum is paid directly to the insured regardless of any other sources of ...
Gain when the underlying asset that moves in one direction is significantly different from the loss when the underlying asset moves in the opposite direction; for example, when gains and ...
Methods by which a home office underwriter chooses applicants that an insurer will accept. The underwriter's job is to spread the costs equitably among members of the group to be insured. ...
Reinsurance clause that stipulates that the reinsurer will be subject to the same fate as the ceding company. ...
Provision found in juvenile insurance that waives the premiums due on the insured child's policy provided that the payor of the premiums becomes totally disabled or dies before the child ...
Same as term Participating Insurance: policy that pays a dividend to its owner. ...
Basic requirements of an employee benefit insurance plan such as minimum age and years of service with an employer. ...
Have a question or comment?
We're here to help.