When does liberalization of insurance coverage occur?

Liberalization of insurance coverage occurs when an insurer broadens coverage without increasing premiums. This concept allows existing policyholders to benefit from enhancements to their policies that expand the scope of coverage, such as additional perks or reduced exclusions, without facing higher costs. Essentially, it reflects the insurer's commitment to providing better protection without placing additional financial burdens on policyholders.

The other options do not appropriately define liberalization. For instance, a policyholder filing a claim does not inherently change the terms of the coverage; it merely signifies the use of the existing policy. Raising premiums across the board indicates a tightening of coverage terms or a response to increased risk, rather than an improvement. Lastly, while a competitive insurance market may lead to better coverage options overall, the term "liberalization" is specifically tied to the expansion of existing policies without added costs, rather than market conditions.