Suspension Provision

What Does Suspension Provision Mean?

A suspension provision is a clause in an insurance policy that outlines the conditions under which coverage may be suspended. When coverage is suspended, the policyholder is not eligible to receive benefits, even if premiums for the affected period have been paid.

This is more commonly referred to as a suspension of coverage.

Insuranceopedia Explains Suspension Provision

Insurers may include suspension provisions in a policy to exclude coverage under specific high-risk conditions. For example, an automobile insurance company might suspend coverage if the insured intends to use the car in inherently dangerous activities, such as performing action sequences for films or participating in bumper car derbies. Should the insured proceed under these conditions, they would not be financially protected against any resulting damages.

Because the exact wording of suspension provisions varies from one insurer to the next, it’s worth reading the fine print when comparing the best car insurance companies before buying a policy. Drivers whose coverage has been suspended and later canceled often have to pick up a non-owner car insurance policy or a high-risk policy to stay legally insured until they can qualify for standard coverage again.