What do third-party provisions in insurance address?

Third-party provisions in insurance specifically address the rights of individuals or entities that are not the primary policyholder but have a legitimate interest in the insurance coverage. This typically applies in situations where a third party has a security interest in a property, such as a lender or lessor.

When a property is financed, the lender often requires that the property be insured, ensuring their financial interest is protected in case of damage or loss. The third-party provisions entail that the insurance policy acknowledges these rights and often stipulates that the insurer must notify the third party of any changes to the policy or its cancellation. This ensures protection for the third parties involved and guarantees that they can make claims against the policy if necessary.

In contrast, the other options revolve around aspects that do not focus on third-party rights in relation to insurance policies. Liability limits relate to what primary policyholders can claim, claims processes focus on coordination among insured individuals, and exclusions detail what is not covered under the policy—all of which do not specifically cater to the rights and interests of third parties.