If a policyholder experiences a covered loss while a policy is in force and proof of loss is submitted after cancellation, how is the claim handled?

• A. Claim must be paid immediately
• B. Claim must be paid after proof of loss is received
• C. Claim is denied due to cancellation
• D. Claim is payable only after premium is paid

Answer: (B)

The key idea is that a claim for a covered loss is handled based on proof of loss, and cancellation doesn’t erase a loss that occurred while the policy was in force. If the loss happened during the period the policy was active, the insurer evaluates the claim once proper proof of loss is submitted, even if the policy has been canceled since then. The proof of loss document is what triggers review and payment of the claim, assuming the loss meets the policy’s terms.

So the claim is payable after the required proof of loss is received. Payment isn’t automatic or contingent on premium payment after cancellation, and cancellation doesn’t automatically deny a claim that occurred during the active coverage, provided the proof of loss is properly filed.