Policy Structure & ProvisionsQuestion 459 of 474
Under the liberalization clause, when an insurer broadens its form without charging more, an existing insured:
a.Must ask the insurer for an endorsement
b.Pays a pro rata additional premium
c.Receives the broader coverage automatically
d.Gets the broader form only at renewal
Explanation
The liberalization clause gives the insured the benefit of a broadening the insurer adopts at no additional premium, without any endorsement, request or new policy. It keeps insureds from being penalized for buying before an improvement was filed and saves the insurer from reissuing every policy in force. Waiting for renewal or paying extra describes what the clause exists to avoid.
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