Arizona Life and Health Practice Exam

If a policyowner submits proof of loss after canceling their insurance, how will the insurer respond?

1. The claim is automatically denied

2. The claim must be paid after proof of loss is received

3. The insurer can charge a penalty

4. The claim is subject to additional review

The correct answer is: The claim must be paid after proof of loss is received

When a policyowner submits proof of loss after canceling their insurance policy, the insurer's response will typically be that the claim must be paid after proof of loss is received, provided that the loss occurred while the policy was in force. This is because insurance contracts generally require the insurer to honor claims for losses that happened during the period of coverage, even if the policy has been canceled afterward. Policy provisions usually allow the policyholder to claim for losses incurred while the policy was active, so as long as the claim aligns with the terms of coverage, including the timing of the loss, the insurer is obligated to process and pay the claim upon satisfactory proof of loss. The insurer cannot deny the claim solely based on the cancellation of the policy if the loss was related to the coverage period. This understanding emphasizes the importance of the coverage duration and the conditions under which claims can be brought against insurers, reinforcing that the timing of the loss in relation to the active policy is what primarily governs the ability to file a successful claim.