Continuous Coverage
What Does Continuous Coverage Mean?
Continuous coverage refers to maintaining insurance coverage without any lapses. It is crucial in both auto and health insurance contexts, as gaps in coverage can lead to legal consequences, expose individuals to financial hardship from unexpected events, and impact premium rates and eligibility.
Insuranceopedia Explains Continuous Coverage
Continuous coverage is essential for several reasons. In the case of auto insurance, most states mandate a minimum level of coverage so that a lapse can lead to legal complications. Additionally, if an individual is involved in an accident while uninsured, they will be responsible for covering repair costs out of pocket. Furthermore, a lapse in coverage often results in significantly higher premium rates when obtaining a new policy. Thus, maintaining continuous coverage is more cost-effective in the long term.
For health insurance, the Health Insurance Portability and Accountability Act (HIPAA) allows individuals to receive credit against pre-existing condition exclusions for maintaining continuous coverage. This ensures that individuals with uninterrupted coverage can switch health insurance plans without being deemed ineligible due to pre-existing conditions.
