What does the term “waiver” signify in insurance contracts?

The term "waiver" in insurance contracts refers to the voluntary relinquishment of a known right or claim. This means that one party, typically the insurer, intentionally gives up a right they would normally enforce. For instance, if an insurer does not enforce specific terms of a policy or chooses to overlook a policyholder's non-compliance with a minor aspect of their contract, the insurer may be seen as waiving their right to enforce those terms in that instance. This can impact future claims and the overall insurer policy-holder relationship since once a right is waived, it might not be enforceable in the future.

In contrast, mandatory requirements for policy renewal involve conditions that must be met for a policy to remain active, while an increase in premium costs typically results from adjustments based on risk assessments or market trends. Refusal to pay claims indicates a more defensive posture from the insurer regarding the claim, rather than a relinquishment of rights. Thus, recognizing the nuance of "waiver" helps in understanding how it can influence the enforcement of insurance contract provisions.