Suspension Of Coverage
What Does Suspension Of Coverage Mean?
Coverage suspension occurs when an insurance company ceases to provide coverage for a policyholder, despite the policy remaining active. This typically happens when the insured fails to comply with the terms of the insurance contract. The suspension may be temporary, and coverage can often be reinstated if the policyholder resolves the issue.
Insuranceopedia Explains Suspension Of Coverage
Insurance companies typically suspend coverage when the policyholder fails to make payments. In most cases, the insured is given a grace period to settle the overdue payments before the policy is entirely canceled.
Additionally, coverage suspension may occur due to a change in the insured’s circumstances that increases the risk of a claim. For instance, if the insured stores hazardous materials at home without informing the insurance company, the insurer may suspend their homeowner’s policy.
