What occurs during the insurance policy renewal process?

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During the insurance policy renewal process, the assessment of previous claims plays a crucial role in determining the terms for the renewed policy. Insurers typically review the claims history of the insured to evaluate risk and adjust premiums accordingly. This assessment helps the insurer to understand any patterns in claims that may indicate a higher risk to the insurer. The history of claims can influence the decision to renew the policy, the conditions of renewal, and the premium rates.

In contrast to the assessment of previous claims, the filing of claims is not a part of the renewal process; claims are related to the current coverage period. New premiums are determined based on a review that includes claims history, market conditions, and risk evaluation, rather than being set without review. As for automatic extensions, while some insurers may offer renewals without requiring new paperwork, coverage is not simply extended without consideration of the previously assessed claims and other factors. The evaluation of past claims and their impact is therefore a key component of the renewal process.

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