Coverage Gap Raises Ethical Quandary
The question posed in my last ethics column on March 11 involved gaps in coverage. When coverage terminates for nonpayment of premiums or other valid reasons, insurers may later reinstate coverage back to the termination date when they are assured that no incidents triggering coverage are known to the insured. Is it ethical to declare that coverage existed for the period of time during which there was no coverage?
One reply questioned whether this is even an ethical problem: "As long as the renewal takes into account sound insurance principles and reliable underwriting information, there is no ethical problem. The parties agree. The insurer gets a good reputation. The insured shows continuous coverage and perhaps avoids a hassle. Its a win-win situation."
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