What feature distinguishes a claims-made policy?

A claims-made policy is distinguished primarily by its requirement that claims must be reported during the policy period itself, regardless of when the incident that caused the claim occurred. This means that for coverage to apply, the policyholder must notify the insurer of a claim while the policy is currently in effect. This feature allows the insurer to manage risks and losses more predictably within the timeframe of the policy duration.

The other choices do not accurately describe the unique characteristics of claims-made policies. For instance, while some claims-made policies might have specific limits and deductibles, there isn't a universal requirement for higher deductibles compared to occurrence policies. Additionally, claims-made policies do not inherently provide unlimited coverage; they still adhere to specified limits. Finally, while some may perceive claims-made policies as more cost-effective under certain circumstances, this is not a guaranteed rule and can vary widely based on underwriting, risk, and the insurer. Therefore, it is the requirement to report claims only during the policy period that is the most definitive characteristic of a claims-made policy.