Policy Period Discussion

I would like to have your opinion on the following situation:

The Personal Liability coverage under Insured Location definition says that any other location that the insured acquires to be used as residence during the policy period is covered.

We issue a 3 yrs policy period (June 2006 to 2009) payable in annual installments. The insured acquires another residence in May 2007, but the policy was not endorsed. In February 2008 the insured had a property damage claim. In my opinion the new location had automatic coverage until the next anniversary which was June 2007. Since it was not included for the renewal

period, I understand there is no coverage for the claim. Thanks in advance for your reply on this matter.

Puerto Rico Subscriber

When the premium is due is not the basis of the policy term. If the effective date on the dec is June 1 2006 – June 1 2009, and there is no option to renew during that time and the premium will not be changed unless there is an endorsement, then you have a true 3-year term and there is coverage for the additional residence. Look at it this way – you have a one-year policy but the premium is billed monthly. That doesn't mean the policy renews every month, it's just when the premium is due. The policy doesn't expire until the end of the year. If the listed expiration date on your policy is June 2009, then the policy is still in force and active, even though it spans multiple years.

 

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