What does preemption refer to in policy management?

Preemption in policy management refers to the scenario where two policies start on the same effective date. In this context, when two policies overlap in terms of their start dates and coverage, it can create complexities around which policy will take precedence in addressing a claim or providing coverage. This situation often requires careful management to ensure that policyholders understand the nuances of their coverage and to resolve any conflicts that may arise from the overlapping policies.

In contrast, the other options focus on different aspects of policy management. The first choice deals with varying coverage limits, which pertains to the specific terms of each policy rather than the timing of their effective dates. The third option, concerning cancellations, deals with policies that are terminated before their full term, which does not speak to preemption. Lastly, the option about policy details being under review refers to a status of the policy rather than the interaction of multiple overlapping policies starting on the same date.