Los Angeles Claims Adjuster Property and Causality Practice Exam

What can lead to a denial of claims when excess liability policies have different inception and expiration dates?

1. Poor underwriting

2. Nonconcurrency

3. Aggregate limits

4. Excess coverage

The correct answer is: Nonconcurrency

The correct answer is nonconcurrency. Nonconcurrency occurs when excess liability policies have different inception and expiration dates. This mismatch can lead to gaps in coverage and potential denial of claims because the policies may not apply in the same time frame, creating ambiguity regarding which policy is responsible for a specific claim. When policies are nonconcurrent, it becomes challenging to determine which policy should respond to a loss, especially if the claim arises during a period when one policy is expired while the other is not yet active. Consequently, this can lead to complications in the claims process, where the insurers may refuse coverage on the basis that the claim is not covered under either policy during the relevant time period. In contrast, issues like poor underwriting, aggregate limits, and excess coverage do not specifically address the problem of differing policy dates in the same way that nonconcurrency does. While these topics are relevant to underwriting practices and policy limits, they do not inherently create the same risk of claims denial resulting from temporal discrepancies in policy coverage.