How will this change apply to Brown's existing policy? Brown Companys Policy includes a liberalization clause.Â Brown's insurer introduces a policy change that broadens coverage at no additional premium.Â
A. The broadened coverage does not apply to Brown Company s policy. B. The broadened coverage automatically applies to Brown Company s policy. C. The broadened coverage will apply to Brown Company s policy with an endorsement. D. The broadened coverage will apply to Brown Company s new policies as they are issued.
B is the answer to this question. It can be confusing to understand details about insurance especially if you are not sure what to expect from the various insurance companies. In order to understand the answer to this question, you need to know what a liberalization clause is.
This is a provision which allows the clients of the company to widen the risks that are being covered by insurance without the need to pay extra money anymore. Do remember that this will affect those who have policies that come with a liberalization clause. Those who do not may be required to pay extra if they want to improve the current policy that they have.