Homeowners Policy (HO)Question 123 of 474
The liberalization clause in a homeowners policy means that:
a.If the insurer broadens coverage without extra premium during the policy term, the broader coverage applies to existing policies
b.The insured may add any coverage at any time during the term without underwriting, and the insurer must issue the endorsement at the rate that was in effect when the policy was written
c.The insurer may raise the premium in the middle of the term whenever the form is broadened, and must refund the difference if the insured rejects the broader coverage
d.Coverage automatically renews every year on the same terms, and the insurer waives its right to non-renew once the policy has been in force for three consecutive years
Explanation
Under the liberalization clause, if the insurer broadens coverage under the form without requiring additional premium during the policy term, the broader coverage applies automatically to all existing policies. It protects insureds from being stuck with narrower coverage solely because their policy was issued earlier.
Law Reference: ISO HO form liberalization clauseThis topic, taught in full in the Personal Lines Insurance Producer guide. Personal Lines Insurance Producer — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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