If a policyholder rejects Loss of Income and Rehabilitation coverage in writing, what is the insurer's obligation for reinstated or renewed policies?

If a policyholder rejects Loss of Income and Rehabilitation coverage in writing, what is the insurer's obligation for reinstated or renewed policies?

• A. The insurer must provide the coverage in all reinstated or renewed policies.
• B. The insurer cannot provide any similar coverage.
• C. The insurer is not required to provide that coverage in any reinstated or renewed policy.
• D. The insurer must offer a substitute coverage.

Answer: (C)

Optional coverages must be affirmatively chosen by the insured. If the policyholder writes a rejection of Loss of Income and Rehabilitation coverage, that coverage isn’t automatically included again when the policy is reinstated or renewed. The insurer is not required to provide that particular coverage in any reinstated or renewed policy; the insured would need to elect it again in writing if they want it to be included. In other words, a prior written rejection stays effective for future terms unless the insured reaffirms the desire to add the coverage. The insurer may offer other options, but there’s no obligation to include Loss of Income and Rehabilitation automatically.

Optional coverages must be affirmatively chosen by the insured. If the policyholder writes a rejection of Loss of Income and Rehabilitation coverage, that coverage isn’t automatically included again when the policy is reinstated or renewed. The insurer is not required to provide that particular coverage in any reinstated or renewed policy; the insured would need to elect it again in writing if they want it to be included.

In other words, a prior written rejection stays effective for future terms unless the insured reaffirms the desire to add the coverage. The insurer may offer other options, but there’s no obligation to include Loss of Income and Rehabilitation automatically.