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Simple English definitions for legal terms
coverage opinion
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A quick definition of coverage opinion:
A coverage opinion is a type of opinion that helps determine whether or not an insurance policy will cover a specific situation. It is like asking someone if your insurance will pay for something before you actually use it. A coverage ratio is a way to measure if a company can pay for its debts. A cover-all clause is a part of a contract that includes everything, like a "mother hubbard" clause. Covered-interest arbitrage is a way to make money by taking advantage of different interest rates in different countries. Covered wages are the amount of money a worker earns that is protected by insurance. A cover note is a written statement from an insurance agent that confirms that you have insurance, but it is different from a binder, which is prepared by the insurance company.
A more thorough explanation:
Definition: A coverage opinion is a legal document that provides an assessment of whether an insurance policy covers a particular claim or situation. It is typically prepared by an attorney or insurance expert.
Example: If a person is involved in a car accident and files a claim with their insurance company, the insurance company may request a coverage opinion to determine if the policy covers the damages. The coverage opinion will outline the policy provisions and analyze whether the claim falls within the scope of coverage.
This example illustrates how a coverage opinion is used to provide guidance on whether an insurance policy covers a specific claim or situation. It helps the insurance company make an informed decision on whether to approve or deny a claim.