A policyowner suffers a covered accident and health insurance loss on June 30 and submits proof of loss to the insurer on July 10. If the policyowner cancelled the coverage on July 2, how will the insurance company handle the claim?

In this scenario, the insurance company is required to honor the claim since the loss occurred before the policy was canceled. The key factor is that the accident and the health insurance loss took place on June 30, which is prior to the cancellation date of July 2. Insurance coverage remains in effect for any losses that occur while the policy is active. Therefore, upon receiving the proof of loss submitted on July 10, the insurer must process the claim and pay it based on the terms of the policy.

The provision that mandates claims be paid when they occur within the coverage period reinforces the importance of policies that protect the insured while the policy is still active. Thus, even though the cancellation happened shortly after the loss, it does not negate the insurer's obligation to cover claims for incidents occurring prior to that cancellation.