Is there a waiting period for an increase in coverage limit if a policy is adjusted mid-term?

When a policy is adjusted mid-term to increase coverage limits, there is typically a waiting period before the new coverage takes effect. This waiting period is essential as it provides the insurer time to assess the changes in risk that come with higher coverage limits. The correct answer indicates a 5-day waiting period, which allows for necessary administrative procedures and risk evaluations to ensure both parties are protected under the new terms.

This waiting period means that if a loss occurs during this time, claims may be settled based on the original, lower limits of coverage. Hence, understanding the implications of increasing coverage mid-term is crucial for policyholders. They should be aware of the timeframe associated with any changes, as risks may not be fully covered until the waiting period concludes.