OTL Practice Exam 2025 – Full Resource for Your Test

Continuous coverage refers to the practice of maintaining an active insurance policy without any lapses or gaps in coverage over time. This concept is crucial in the insurance industry because a seamless transition from one policy period to the next ensures that the insured remains protected against losses or liabilities. For example, if an individual allows their automobile insurance to lapse, any accidents occurring during that gap would not be covered, potentially leading to significant financial consequences.

In contrast, having multiple insurance policies at once does not necessarily guarantee continuous coverage. Switching insurers frequently may create gaps in coverage depending on how the transitions are handled. A one-time insurance payment does not address the ongoing need for sustained coverage throughout the policy period. Thus, maintaining an insurance policy without interruptions is essential for preserving protection and benefits under the policy.