What does the term 'renewal' refer to in the context of general insurance?

In the context of general insurance, the term 'renewal' specifically refers to the process of extending an insurance policy. This typically occurs at the end of the policy term, when the insurer and the insured agree to continue the coverage under the same terms or possibly with some modifications. The renewal process often involves assessment of the insured's current risk profile, reviewing any claims made during the previous term, and adjusting premiums accordingly.

Renewals are crucial in insurance as they ensure continuous coverage for the policyholder and provide the insurer with the opportunity to re-evaluate the risk associated with covering that particular individual or entity. This cycle helps maintain stability in the insurance market and guarantees that both parties remain informed about the terms of coverage.