What occurs when obligations of a conditional contract are not met?

When obligations of a conditional contract are not met, the insurer may deny coverage. This situation arises because a conditional contract typically includes specific conditions that must be fulfilled for coverage to be effective. If one party, particularly the insured, fails to meet these obligations—such as timely payment of premiums or adherence to policy requirements—the insurer is within its rights to deny any claims for coverage that might arise from the insured’s failure to comply with the terms laid out in the contract.

This principle is foundational in insurance contracts where both parties enter into an agreement based on certain conditions. If these conditions are unmet, it effectively voids the insurer's obligation to provide coverage, leading to denial of claims related to incidents that occur during that lapse of compliance. Therefore, understanding this aspect of conditional contracts is crucial for anyone involved in insurance or dealing with surplus lines in Texas.