What does Claims Paid Policy mean? Read on to discover the definition & meaning of the term Claims Paid Policy - to help you better understand the language used in insurance policies.
Claims Paid Policy
A liability insurance policy that is triggered at the time a claim is paid, rather than at the time a claim is first reported (claims-made policy) or at the time the injury or damage occurs (occurrence policy). This approach can offer significant benefits in terms of pricing accuracy. However, since claims will be paid only while the policy remains active, the insured facing a claim cannot cancel the policy while the claim is pending, often for years, unless he or she is willing to pay the claim out of personal assets.
We hope the you have a better understanding of the meaning of Claims Paid Policy.