Under the Change of Occupation provision, what action can an insurer take if an insured chooses a less hazardous occupation?

The Change of Occupation provision is designed to address situations where an insured individual's occupation changes, especially regarding the level of risk associated with that occupation. If an insured chooses a less hazardous occupation, the insurer has an incentive to adjust the terms of the policy reflective of the reduced risk.

When an insured moves to a less dangerous job, the likelihood of filing a claim decreases. Therefore, the insurer can consider this change a positive factor and might choose to reduce premiums for the insured. This is because the insurer's risk is lowered, and in fairness and competitive practice, they may pass some of that savings back to the insured by lowering their premium costs.

In contrast, actions like revoking the policy, increasing coverage amount, or limiting benefits would not be aligned with the risk management principles that underlie insurance. Revoking coverage or limiting benefits generally pertains to situations where the insurer is facing increased risk, while increasing the coverage amount could be viewed as an increase in risk that contradicts the change to a less hazardous occupation. Hence, reducing premiums is the logical and equitable choice in this scenario.