What happens if an insurer decides to broaden its coverage for existing policyholders?

When an insurer broadens its coverage for existing policyholders, the new coverage typically applies automatically at no extra cost. This means that as a way to enhance customer satisfaction and retain policyholders, the insurer opts to extend certain benefits or provisions without requiring any additional payment from the policyholders. This approach not only adds value to the existing policies but also demonstrates the insurer's commitment to its customers.

Automatically applying new coverages is an effective strategy to build goodwill and customer loyalty, as it eliminates the upfront need for policyholders to request or possibly pay for these enhancements. This practice can also simplify the claims process and overall policy management for both the insurer and the policyholders.

In contrast, options that involve policyholders needing to request changes, being charged a fee, or limiting broadened coverage only to new policies do not align with the typical practices of how insurance enhancements are implemented. Insurers often strive to keep existing clients satisfied and, therefore, willingly incorporate improvements into their existing coverage as a standard practice.