Georgia Navigator Practice Exam

In what scenario can insurance automatically be considered non-renewable?

1. When the insured has a positive health record

2. When premium payments are not made

3. When claims exceed the cap

4. When all family members are covered

The correct answer is: When premium payments are not made

The scenario in which insurance can automatically be considered non-renewable is when premium payments are not made. If an insured individual fails to pay their premiums, the insurer is typically within their rights to terminate the policy upon renewal. Insurance contracts are contingent upon timely premium payments, which means that consistent payment is required to maintain coverage. When premiums remain unpaid, the insurer may choose not to renew the policy, leading to a lapse in coverage for the policyholder. Other scenarios, such as having a positive health record or having claims exceed the cap, do not automatically lead to non-renewal. For instance, a positive health record generally supports the renewal of a policy, as it indicates lower risk to the insurer. Claims exceeding a certain cap might lead to increased premiums or policy adjustments, but they do not inherently cause non-renewal. Similarly, having all family members covered typically signifies a comprehensive approach to insurance rather than a reason for non-renewal.