North Carolina Adjuster Practice Exam

What is a consequence of failing to report claims timely under a government crime policy?

1. The insurer may deny the claim

2. Higher premiums for future policies

3. Automatic coverage for all losses

4. Expanded coverage limits

The correct answer is: The insurer may deny the claim

Failing to report claims in a timely manner under a government crime policy can lead to the denial of the claim by the insurer. This consequence is rooted in the expectation that policyholders will promptly notify the insurance company of any losses or incidents that could lead to a claim. Timely reporting allows the insurer to investigate and assess the claim accurately and fairly, which is essential for proper claims handling. If a claim is reported late, this could hinder the insurer's ability to investigate effectively, leading to potential gaps in information or evidence that might otherwise support the claim. As a result, the insurer may invoke policy provisions regarding timely notification and deny the claim based on the failure to comply with these requirements. This emphasizes the importance of understanding the conditions and obligations outlined in insurance policies.