Most insurance policies provide coverage for claims arising from a loss that occured during a policy period. When I say most insurance policies, I mean to say all that I can think of with the exception of health insurance.
For example. If you are in a car accident, but your policy lapses 2 days later. That accident is covered. They are responsible to pay for the damages, medical bills, etc.. (all within your limits of course!)…. but it doesn’t matter that you no longer have insurance with them. You paid for coverage during that period of time.
Liability insurance?… you betcha 🙂 They are responsible to for any claims stemming from incidents that occurred during your policy effective dates. If I have liability insurance for two years, and then I switch companies. If a claim comes up for something that happened during the time I had insurance with the first company (lets say someone waits a few years to sue me..) then the company I had coverage with at that time is responsible.
Why is it then that health insurance only covers you during the time that you have coverage? I hear people complaining about the issue with pre-existing conditions. If health insurance worked the same way as all other insurance, so long as you have coverage throughout your life, then you would always have coverage for your medical bills. If you broke your leg while having insurance with Blue Cross Blue Shield and all was fine. And then your employer switched companies to Aetna and a while later you went to the doctor to have your legged checked up on, there wouldn’t be an issue.. it would just be a simple, when did “condition” originally manifest… who did you have insurance with at that time.. oh, then they are the one footing the bill.
This would also encourage health insurance companies to want to keep you on as an insured, and to be willing to pay for more preventative coverage, because if something happens on their watch, they’ve got to cover you until its over… (at least until your policy limits).
Sorry to rant, I just had this thought today, and I wondered why (aside from greed) do we not have a health insurance system that works the same way as property insurance.